Martinez City Council
March 18, 2026

INTRODUCTION
On November 2, 2022, the City Council adopted the General Plan 2035 with the accompanying Environmental Impact Report, superseding the General Plan 1973. The General Plan 2035 puts forth five primary goals for the City:

1. Enhancing the Downtown as the central focus of the community;

2. Protecting residential neighborhoods and environmental resources;

3. Balancing future development with the provision of adequate services, facilities, and infrastructure;

4. Collaborating on regional planning efforts; meetings housing needs; and

5. Providing for economic development to maintain a high level of City services.

Government Code Section 65400( a)(2) requires that every city and county submit an annual progress report to their legislative body, the Governor’s Office of Land Use and Climate Innovation (“LCI”), formerly known as the Governor’s Office of Planning and Research ( “OPR”), and the California Department of Housing and Community Development ( “HCD”) on the implementation status of their General Plan.

This General Plan Annual Progress Report covers the period from January 1, 2025 to December 31, 2025. The Annual Progress Report provides a connection between land use decisions made by the City in 2025 and the goals, policies, and implementation methods found in the current General Plan.

The purpose of the Annual Progress Report is to give an update on the implementation progress of the City’s General Plan for the reporting year of 2025.

General Plan Amendments in 2025
On July 30, 2025, the City Council adopted Resolution No. 25-108, approving amendments to the Land Use Element of the General Plan by adding the Mixed -Use Housing (“MUO”) land use designation, which encourages residential development by allowing increased residential densities and by right development processing in exchange for the provision of at least 20 percent very low- and low-income or 30 percent moderate-income housing units. The following six sites were amended to MUO land use designation:
• 0 Arnold Way APN 161-130-020
• 0 Howe Road APN 377-020-051
• 0 Howe Road APN 377-020-057
• 0 Arnold Road APN 377-120-030
• 1027 Arnold Drive APN 377-120-035
• 0 Arnold Drive APN 377-120-039
The amendments and adoption of this Resolution were necessary t o comply with State law, to facilitate housing production, and to provide clarity between State and local regulations.

No other General Plan Elements were amended in 2025.

General Plan Elements Implementation
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The General Plan 2035 contains ten individual planning elements (land use, circulation, housing, community facilities, open space, noise, parks and recreation, growth management, scenic roadways, and safety). The State allows elements to be combined or the addition of new elements provided the required seven elements are present in some fashion. Following are notable General Plan implementation efforts, broken down by element:

Land Use Element:
• Key Programs and Policies. The Land Use Element serves as a central element to the General Plan, ensuring integration of policies relating to residential, commercial, and industrial land uses, as well as open space conservation. • General Plan Consistency. The City implements the Land Use Element in reviewing building permits and development entitlements to ensure consistency with the land use policies and programs in the Land Use Element. These focus on land use, density, circulation, utilities, open space and conservation, and environmental protection. • Building Permits. The City reviewed 1,775 building permits in 202 5, addressing residential, commercial, industrial, and utility land use actions. Issuance of building permits included application of current California Building Code (“CBC”) and related Codes, including the California Green Building Standards Code. • Planning Entitlements. The City reviewed 112 entitlement actions in 2025, consisting of conditional use permits, variances, parcel maps, lot line adjustments, minor subdivisions, minor exceptions, certificates of compliance, sign permits, and tree removal permits.

Entitlement applications were reviewed by staff, the Zoning Administrator, Planning Commission, and/or City Council, depending upon the type of application being considered.
• Business Licenses. The City reviewed 260 business licenses. • Affordable Housing. The City issued building permits for 18 affordable housing units in 2025, including 11 extremely low-, six very low-, five low-, and five moderate-income units.

Additionally, the City entitled the Wyoming Heights project, which includes eight units affordable to low-income households.
• California Building Standards Code. On November 19, 2025, the City Council adopted Ordinance No. 1479, which repealed the 2022 California Building Standards Code and adopted by reference the 2025 California Building Standards Code.

Open Space and Conservation Element:
• Key Programs and Policies. Key programs and policies focus on protection of permanent open space lands, conservation of open space lands, and various waterways and basin protection measures.
• Waterfront and Marina Revitalization . On December 17, 2025, the City Council adopted Resolution No. 25-154, authorizing the Mayor to enter into an Exclusive Negotiating Agreement between the City and Tucker Sadler Architects, in a form approved by the City Attorney, for the revitalization of the Martinez Waterfront and Marina. • Municipal Fishing Pier. The Martinez Municipal Fishing Pier (“Pier”) was originally constructed in 1934, with various additions and sections rebuilt in 1976. In November 2024, the City began the planned renovations to the Pier, including structural work, new decking and railings, improved lighting, and amenities such as new benches, picnic tables, 119

ADA-accessible seating and tables, and receptacles. On November 8, 2025, the City held the Grand Reopening of the newly renovated Pier.

Historic, Cultural, and Arts Element:
• Key Programs and Policies. The Historic, Cultural, and Arts Element is designed to establish goals, policies, and implementation measures that will help protect and enhance the City’s significant historic and cultural resources and encourage art and cultural enhancements within the City to add to the rich fabric of life enjoyed by Martinez citizens. • Historic Preservation. The City continues to require discretionary projects to comply with all requirements of CEQA, California Office of Historic Presentation (“OHP”), and National Register of Historic Places. In 2025, the City did not add any structures to any local, State, or federal registers.
• Old Train Depot. On November, 19, 2025 , the City a warded a construction contract, totaling $133,980 from Cultural Facility Fees , to All About Building Inc. to complete remediation of the Old Train Depot.
• Universal Sports Academy Complex Mural. In 2025, the Joe DiMaggio Hometown Hero Project fundraised for the approved public art project for a mural to be painted on the southern wall of the Universal Sports Academy Complex, located at 330 Ferry Street. The mural, proposed by the Joe DiMaggio Hometown Her o Project, will be painted by local Artist, Tim Hon, and will celebrate Martinez’s history, landscapes, and prominent figures and places, including Joe Dimaggio and John Muir.
• Art Pianos. On July 31, 2024, the City Council approved a public art application submitted by Megan Kammerer of the Martinez Arts Assoc iation, to install temporary pianos at different locations within the City, with a pilot installation project at the Main Street Plaza.

The pilot piano, painted by Bay Area artist Chris Granilllo, featured local flora and fauna.

The Martinez Art Piano project continued with the relocation of the original piano to Plaza Ignacio and an installation of a new second piano featuring geometric designs, painted by artist Andrew Lott, on Main Street Plaza from May 2025 to October 2025. • Boys and Girls Club Mural. On November 19, 2025, the City Council approved a public art application submitted by Marin Clean Energy and artist Timothy Hon for a mural to be painted on the northern wall of the Boys and Girls Club of Contra Costa County, located at 1301 Alhambra Avenue.
• Papa Jake Larson Statue. On October 22, 2025, the City Council approved a public art application submitted by Brandy Leidgen to install a full-figure bronze statue of World War II veteran and long-time resident of Martinez, Papa Jake Larson. • Día de los Muertos . T he Martinez Arts Association, Contra Costa Library, and the Community and Recreation Services Division collaborated to host the inaugural Día de los Muertos event at Ignacio Plaza. The celebration featured a community altar, local artist altars, a mariachi band, youth folklorico dancers, story time with the library, and Aztec dancers. The event attracted over 500 attendees, highlighted the cultural significance and community impact.
• Diversity and Cultural Commission. The Diversity and Cultural Commission held three meetings in 2025 to discuss the Martinez Four -Year Strategic Plan, attend Brown Act Training, and appoint the Chair and Vice Chair for the Commission. This Commission is part of the City’s ongoing efforts to implement its Diversity, Equity, Inclusion, and Belonging (“DEIB”) Roadmap
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Parks and Recreation Element:
• Key Programs and Policies. Key programs and policies prioritize adequate availability of parks and recreation facilities for Martinez residents, acquisition of lands for parks, and waterfront recreation uses.
• Recreation Programs. The City continued to offer a wide range of recreation programs to Martinez residents, including 550 camp participants, 599 senior/inclusive programs, 325 sport field rental days, 696 picnic facility rentals , 459 facility rentals , 286 Special Event Permits issued, and 10 City -led special events . The City transitioned to more environmentally-friendly giveaways at City events and modified the event approval process to address solid waste collection and ADA access issues. • Park Maintenance. The City’s Public Works Department continued to maintain City - owned park and recreation facilities.
• New Parks and Park Improvements. On July 3, 2025, the City held a ribbon cutting ceremony to celebrate the opening of Pine Meadow Park.
• Park System Master Plan. The City hired Gates Studio to assist with updating the Park System Master Plan to create a 15 -year roadmap for enhancing, maintaining, and developing parks and open spaces. This community -driven process aims to improve facilities, boost accessibility, and ensure long- term, sustainable stewardship of local recreational assets.

Circulation Element:
• Key Programs and Policies. Circulation Element policies and programs focus on ensuring provision of circulation on City streets for vehicles, bicycles, and pedestrians, increasing the efficiency and safety of roadways, and maintaining the Circulation and Scenic Roadways.
• Traffic Analysis. Projects which may result in generation of significant new traffic were required to submit traffic analyses to be considered as part of development entitlement reviews.
• Parking Infrastructure Capital Grant. The City continued to implement an approximately $1.2 million grant from MTC to facilitate the implementation of the Downtown Parking Study, including the installation and/or upgrades to the parking meters/kiosks and the installation of new wayfinding signage in the Downtown area. This program is intended to reduce the amount of time vehicles will be traveling to locate a parking spot, thereby reducing the amount of vehicle emissions and improving air quality. • Regional Coordination. The City continued in 20253 to work with regional agencies, including the Association of Bay Area Governments (“ABAG”)/MTC and the Contra Costa Transportation Commission (“ CCTA”), to ensure a comprehensive approach was taken with respect to regional transportation issues. In 2025, the City worked with CCTA on the preliminary design for the Martinez Amtrak Mobility Station Shared Mobility Hub, which proposes to sever al enhancements to the station by improving pedestrian pathways, reconfigured pick-up/drop-off area, expanded and upgraded bus bays, additional parking for electric vehicles, enhanced wayfinding signage, on- site bike storage, e-bike charging stations, bike sharing facilities, new bike connections, and vibrant plaza additions. • Street Maintenance and Improvements. The City undertook several roadway improvement projects in 2025, as well ongoing street maintenance actions. 121

• Scenic Roadways. No significant implementation action regarding scenic roadways took place in 2025.

Public Safety Element:
• Key Programs and Policies. The Safety Element contains programs and policies focused on protection from seismic hazards and other geologic hazards and constraints, as well as fire hazards and flood hazards.
• Building and Grading Permit Review. As appropriate, building permit and grading plan review also includes review of soils and geotechnical reports to ensure application of mitigation measures designed to ensure safety of residents and workers, as well as application of the California Building Code requirements related to seismic safety. • Flood Hazard Areas. New development in flood-hazard areas also required submission of engineering analyses to ensure protection from flooding. • High Fire Hazards. Construction in high fire hazard areas required use of ignition - resistant materials on exterior features to reduce threat from wildfires. • Martinez Alerts. The City continued to promote and expand registration in Martinez Alerts to supplement the Community Warning System and provide timely alerts to the community and interested parties. This alert and warning system, powered by Rave, has continued to enable the City to provide interested parties with critical information quickly in a variety of situations, such as health alerts, severe weather, unexpected road closures, police activity, missing persons , and evacuations of buildings or neighborhoods. Interested parties receive time-sensitive messages via text, email, or voice.

Noise and Air Quality Element:
• Key Programs and Policies. The Noise and Air Quality Element contains programs and policies focused on identifying and apprais ing noise problems in the community and establishes local air quality standards.
• Parking Infrastructure Capital Grant. The City continued to implement an approximately $1.2 million grant from MTC t o facilitate the implementation of the Downtown Parking Study, including the installation and/or upgrades to the parking meters/kiosks and the installation of new wayfinding signage in the Downtown area. This program is intended to reduce the amount of time vehicles will be traveling to locate a parking spot, thereby reducing the amount of vehicle emissions and improving air quality.

Environmental Justice and Disadvantaged Communities Element:
• Key Programs and Policies. The Environmental Justice and Disadvantaged Communities Element documents and addresses the needs of these two disadvantaged communities through the provision of information, policies, and programs. • Sensitive Land Use. The City continues to analyze projects for sensitivity to surrounding land uses and advocates for discretionary projects to pursue environmental analysis through the CEQA process.
• Remediation. The City continues to require projects with known contamination to undergo analysis and subsequent remediation when required.
• Disadvantaged Community. On October 9, 2025, the Planning Division created a Tenant Habitability and Relocation Form for the Unpermitted Dwelling Unit Amnesty Program, to be used if a unit is required to undergo repairs as identified during a Building Inspection 122

and repairs, and such repairs will make the unit uninhabitable. The City’s website has been updated to provide comprehensive information on a resources, rebates, and incentives available to residents and business owners, including LIHEAP, the Weatherization Program, Bay Area SunShares, BayREN EASE Home Program, PACE financing, MCE and PG&E programs, and other state and County programs or resources. The City participates in the Contra Costa County Neighborhood Preservation Program, which assists low -income homeowners with housing rehabilitation activities and is currently administered by Habitat for Humanity East Bay/Silicon Valley. Additionally, the City reached out to local programs and organizations to help fund repairs and provide assistance for housing rehabilitation. Contacted organizations included Habitat for Humanity East Bay, Rebuild Together, Rotary Club of Martinez, Scouts of America, Self Help Enterprises, Kars4Kids, Cashforcars, and Contra Costa County.

Growth Management Element:
• Key Programs and Policies. The Growth Management Element is used to manage and mitigate the impacts of future growth and development.
• Water Main Replacement Project. The City replaced existing watermains that were undersized and in poor conditions to improve water flows and services throughout the City and reduce the maintenance of these watermains. Location and lengths of water mains replaced includes the following: West Green Street between Carquinez Way and Green Street (1,050 feet); Green Street between Hillside Drive and Carquinez Way (625 feet); Mellus Street between Berrellesa and Alhambra (220 feet); Robinson Street between Berrellesa and Alhambra (255 feet), for a total of 0.41 miles covered. • Escobar Street Parking Lot. The City completed improvements and provided approximately an additional 6,000 square feet of parking lot with 13 new off-street parking spaces and one new on-street parking space at the Escobar Street parking lot. • Bicycle Storage Racks. The City initiated a pilot to install 20 new bicycle storage racks in the Downtown and in front of City Hall to expand access to “parking” for bicycles in key areas. A total of 17 on-street bicycle storage racks will be installed within 20 feet of a vehicle approach side of marked and unmarked crosswalks adjacent to Downtown businesses.

Specific Area Plans:
• Key Programs and Policies. This section of the General Plan governs land- use and resource conservation, site design, building, development phasing, circulation, community service, and public facility at the subarea level.
• Existing Specific Plans. Specific Area Plan details are included for the following areas:
1) Downtown and 2) Alhambra Hills.
• Specific Plan Implementation. Implementation actions for the Specific Area Plans involved review of building permit and development entitlement applications to determine consistency with the Area Plans policies and programs, which focus on land use, residential densities, circulation, utilities, open space and conservation, and environmental protection.
• Housing Element Annual Progress Report. Please see the City’s 2025 Housing Element Annual Progress Report for information on the implementation of the Downtown Specific Plan.
• Specific Plan Amendments. Neither Specific Plan was amended in 2025. 123

STAFF REPORT
City Council

Date: March 18, 2026
To: Mayor and City Council
From: Michael Chandler, City Manager
Prepared By: Joe Enke, Public Works Director
Srinivas Muktevi, Assistant City Engineer
Title: Acceptance of Webster Pump Station Project No. C7050

Recommendation
Adopt a resolution accepting the Webster Pump Station Project No. C7050, as complete per the contract documents, directing the City Clerk to file a Notice of Completion.

Background
The Project was advertised on July 22, 2024, and bids were opened on August 20, 2024. The City Council adopted Resolution No. 135-24 to accept the bid of Corcus Construction Inc. as the lowest responsive and responsible bidder and authorizing the City Manager to execute a contract for an amount not to exceed $805,202, including a 10% contingency of $73,200.

Discussion
A preconstruction meeting took place on April 23, 2025, to review the work outlined in the approved plans and specifications. The meeting also covered the project’s administrative procedures and established the primary contacts for both the contractor and the City representative. A Notice to Proceed for construction was issued, with construction activities commencing on April 1, 2025. The project replaced the hydro -pneumatic pressure tank , and included grading, construction of a new retaining wall to improve access, and updated pressure control piping and switches.

The contractor has provided a guarant y bond, affirming their commitment to rectify any defects as detailed in the contract for a period of one year. Staff recommend that the City Council acknowledge the improvements made in connection with this project, which was completed on December 31, 2025.

Fiscal Impact
The total cost for the improvements is $745,224, which included four change orders totaling $13,224.

The total cost is under the authorized budget of $805,202.

Attachments
 Resolution – Accepting Webster Pump Station Project No. C7050  Attachment A – Notice of Completion Webster Pump Station C7050 124
RECORDING REQUESTED BY:

City Clerk, City of Martinez
WHEN RECORDED, MAIL TO:

City Clerk
City of Martinez
525 Henrietta Street
Martinez, CA 94553
(space above this line for Recorder’s use only)

NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN of completion of the following public work on improvement:

1. Project Name: _________________________________________________________

2. Date of Completion: _____________________________________________________

3. Name and Address of Fee Owner:
_____________________________________________________________________

4. Name and Address of Direct Contractor:
_____________________________________________________________________

5. Name and Address of Construction Lender: __________________________________

6. Description of Site: _____________________________________________________ _____________________________________________________________________ _____________________________________________________________________ I, __________________, say I am the City Manager for the City of Martinez, owner of the aforementioned interest or estate in the property described in the above Notice of Completion, and as such, make this verification on behalf of the City of Martinez, and that I have read the above Notice of Completion and know the contents thereof and that the facts stated therein are true of my own knowledge. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed on ______________________,
at Martinez, California
_________________________________
_____________________, City Manager
ATTEST:
_________________________________
_________________, City Clerk

ATTACHMENT A
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RESOLUTION NO. 26 - ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARTINEZ, ACCEPTING THE WEBSTER PUMP STATION PROJECT NO. C7050 AS

COMPLETE PER CONTRACT DOCUMENTS AND DIRECTING THE CITY CLERK TO

FILE A NOTICE OF COMPLETION

WHEREAS, the City of Martinez has entered into a contract with Corcus Construction Inc. for construction work described in the Webster Pump Station Project No. C7050; and WHEREAS, the project included replacement of the hydro -pneumatic tank, grading , retaining wall construction, and pressure control devises; and WHEREAS, all work, including punch list items, was completed on December 31, 2025; and
WHEREAS, the final total cost of construction is $745,224; and WHEREAS, Corcus Construction Inc. submitted as -built drawings and a one -year Guaranty bond; and
WHEREAS, the City Engineer has recommended acceptance of said work as having been completed in accordance with the plans and specifications prepared.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Martinez hereby accepts the Webster Pump Station Project No. C7050 as complete.

BE IT FURTHER RESOLVED that the City Clerk is hereby directed to file a Notice of Completion for said project in the office of the Contra Costa County Recorder. * * * * *
I HEREBY CERTIFY that the foregoing is a true and correct copy of a resolution duly adopted by the City Council of the City of Martinez at a Regular Meeting of said Council held on the 18th day of March 2026, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

__________________________________

KAT GALILEO, CITY CLERK

CITY OF MARTINEZ

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STAFF REPORT
City Council

City Council Staff Report Page 1 of 4
Date: March 18, 2026
To: Mayor and City Council
From: Michael Chandler, City Manager
Prepared By: June Du, Finance Director
Courtney Butler, Accountant
Title: Citywide Payment Processing System Vendor Selection

Recommendation
Adopt a resolution authorizing the City Manager to execute an agreement with Invoice Cloud to provide a payment processing platform for Water Utility, Permit, and Police Department payment processing.

Background
The City of Martinez has not comprehensively reviewed or upgraded its payment processing system since 2017. Currently, the city accepts payments through a combination of in -person (cash, check, and credit card at the front counter) and online platforms. These platforms include:
 Tyler Munis – Citizen Self Service for utility billing  Accela for development permits
 CivicRec for recreation program registrations
Each of these systems resides on a separate webpage within the City’s website, creating a fragmented experience for residents. This decentralized structure has caused inconvenience, especially for residents who need to make multiple types of payments.

In addition to website navigation challenges, the available payment option s are limited. For example, utility payments can only be made online using a credit card (for one -time payments) or via automatic bank account withdrawal (ACH). Modern, flexible options such as Apple Pay, Venmo, eCheck, and mobile pay are not currently available.

If approved, implementation is scheduled to begin April 1, 2026, with an anticipated system launch in July 2026.

Discussion
The Finance Department conducted a Request for Proposals (RFP) process to evaluate payment processing platforms capable of supporting online, mobile, and phone-based payment channels while integrating with the City’s Tyler Munis financial system. 127

City Council Staff Report Page 2 of 4
Eight vendors responded to the RFP. After a thorough review of the proposals, staff selected the top four firms to advance to the next round for consideration. These firms were (in no particular order):
 EUNA Solutions
 Invoice Cloud
 Pay It, LLC
 Tyler Technologies
Each of these vendors demonstrated competitive pricing and service offerings. However, variations in platform functionality, user experience, system integration, and customer support required further evaluation and discussion.

On July 28, 2025, staff presented the four vendors to the Budget and Finance Subcommittee, where each firm demonstrated its platform. The Subcommittee recommended staff conduct additional evaluations and return with a comprehensive analysis to support the final recommendation.

Following the Subcommittee meeting, staff re-evaluated the proposals and narrowed the list to EUNA Solutions, Invoice Cloud, and Pay It, LLC , and presented a second time to the Subcommittee on November 17, 2025. Additional discussions were held with each vendor to clarify questions and assess detailed aspects such as product functionality, customer interface, software security, integra tion capability, and operational efficiency. The Subcommittee recommended selecting a vendor that offers residents a simple, user ‑friendly payment experience with multiple payment options, while also providing staff with streamlined functionality and comprehensive reporting capabilities. The Subcommittee emphasized that the system should not create additional work for staff but inste ad simplify processes and reduce administrative burden.

Vendor Selection
Invoice Cloud was ultimately selected because it provides a comprehensive, municipal-focused cloud platform offering multiple convenient payment channels, seamless integration with the City’s Tyler Munis financial system, broad payment method support, and customer -friendly features such as automated reminders, paperless billing, and a self-service customer portal.

Invoice Cloud is a cloud -based Electronic Bill Presentment and Payment (EBPP) platform designed specifically for municipal governments. The system allows residents and customers to view and pay bills through multiple channels, including online payments, mobile payments, and phone-based Interactive Voice Response (IVR) payments.

The platform also enhances the customer experience by offering a secure customer portal where users can manage their accounts, view payment history, enroll in paperless billing, and receive automated reminders for upcoming or past-due payments.
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City Council Staff Report Page 3 of 4
Key capabilities include:
• Online, mobile, and phone payment options
• Automated payment reminders via email and text
• Paperless billing enrollment and notifications
• Integration with Tyler Munis for payment posting and reconciliation • Support for credit cards, ACH/eCheck, PayPal, Apple Pay, and Google Pay • Customer portal for account management and payment history • Reporting tools that support daily reconciliation and payment tracking The platform complies with industry security standards , including Payment Card Industry (PCI) requirements and secure cloud hosting.

Invoice Cloud demonstrated strong capabilities in digital payment processing, customer communication tools, and integration with Tyler Munis, which aligns well with the City’s current financial systems and operational workflows.

Information Technology Coordination
The Information Technology Division participated in the evaluation process to ensure the selected platform meets the City’s technical infrastructure and cybersecurity requirements.

Invoice Cloud integrates with Tyler Munis through secure batch file transfers that allow payment transactions to post to the City’s financial system while maintaining current reconciliation workflows.

IT staff will continue to coordinate with the Finance Depa rtment and Invoice Cloud throughout implementation to support system integration, testing, and security validation.

The tentative system go-live is projected for August 2026, subject to completion of testing and system readiness.

Prior to launch, staff pla ns to return to the City Council to provide a demonstration of the new payment platform.

Customer Outreach
Prior to implementation, the City will conduct outreach to inform residents about the new payment platform and available payment options.

Communication efforts will include website updates, utility bill messaging, newsletters, and informational materials to help customers transition to the new system.

Pricing
The proposed pricing structure aligns with the City Council policy , allowing credit card convenience fees of up to 3% to be passed on to customers.

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City Council Staff Report Page 4 of 4
Typical transaction pricing includes:
 Credit Card Payments - 2.49% transaction fee with a $2 minimum (customer-paid)  ACH / eCheck Payments - Approximately $0.35 per transaction (City-paid)  IVR Phone Payments - Approximately $0.35 per transaction (customer-paid)  Paperless Billing Fee - Approximately $0.10 per transaction (City-paid) The City will utilize four (4) card-present payment terminals at up to $30 per device per month.

Implementation Timeline
Implementation is scheduled to begin April 1, 2026 , and is expected to take approximately four months.

The anticipated implementation phases include:
 Project kickoff and planning – April 2026
 System configuration and integration – April–May 2026  Testing and user acceptance testing – June 2026
 Staff training and final preparation – July 2026
Next Steps

1. Staff will begin the implementation process on April 1, 2026.

2. Bring back to the council for 2nd meeting in July for a live demo from Invoice Cloud.

3. July Public outreach to the residents.

4. August 2026 Go Live.

Conclusion
Implementing the Invoice Cloud payment platform will modernize the City’s payment processing system, provide residents with more convenient payment options, and improve operational efficiency for staff.

Fiscal Impact
The agreement waived the implementation cost associated with system configuration, integration, testing, and deployment, and has transaction-based pricing.

The majority of these costs will be funded through the Water Fund, as utility billing represents the largest share of payment transactions processed through the platform. Transactions related to permitting and public safety will be allocated through the General Fund.

Ongoing credit card processing fees will continue to be paid by customers at the time of the transaction, consistent with City policy.

Attachments
 Resolution - City Wide Payment Processing Vendor
 Attachment A – Sample Agreement
 Exhibit A – Invoice Cloud Fee Schedule
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Biller Agreement
Biller Agreement Rev 5.1.5
The complete Biller Agreement includes the Biller Order Form, the Biller T+C and this Agreement.

P a g e | 1

1. License G
rant & Restrictions. Subject to execution by Biller of the Invoice Cloud Biller Order Form incorporating this Agreement, Invoice Cloud hereby grants Biller a non-exclusive, non-transferable, worldwide right to use the Service described on the Biller Order Form until termination as provided herein, solely for the following purposes, and specifically to bill and receive payment from Biller’s own customers, for Services that are referenced in the Biller Order Form. All rights not expressly granted to Biller are reserved by Invoice Cloud and its licensors.

Biller will provide to Invoice Cloud all Biller Data generated for Biller’s Customers. Unless otherwise expressly agreed to in writing by Invoice Cloud to the contrary, Invoice Cloud will process all of Biller’s Customers’ Payment Instrument Transactions requirements related to the Biller Data and will do so via electronic data transmission according to our formats and procedures for each electronic payment type selected in the Biller Order Form. In addition, Biller will execute all third-party applications and enter into all agreements required for the Service without unreasonable delay, including without limitation Payment Processing Agreements and merchant agreements that may be required upon Implementation, or later at such time as the Service operates with different or multiple payment processors. Throughout the Term of this Agreement, for “Invoice Types” listed on the Biller Order Form (e.g., real estate taxes, utility bills, parking tickets, insurance premium, loans, etc.), Biller will not use the credit card processing, ACH or check processing of any bank, payment processor, entity, or person, other than Invoice Cloud via electronic data transmission or the authorization for processing of Biller’s Customers’ Payment Instrument Transactions, for each electronic payment method selected in the Biller Order Form.

Biller shall not: (i) license, sublicense, sell, resell, transfer, assign, distribute or otherwise commercially exploit or make available to any third party the Service in any way; (ii) modify or make derivative works based upon the Service; (iii) recreate, "frame" or "mirror" any portion of the Service on any other server or wireless or Internet-based device; (iv) reverse engineer or access the Service; or (v) copy any features, functions or graphics of the Service.

2. Privacy & Security. Invoice Cloud's privacy and security policies may be viewed at http://www.invoicecloud.com/privacy.html. Invoice Cloud reserves the right to modify its privacy and security policies in its reasonable discretion from time to time which modification shall not materially adversely
impact such policies. Invoice Cloud will maintain compliance with current required Payment Card Industry (PCI) standards and Cardholder Information Security standards.

3. Account Information and Data. Invoice Cloud does not and will not own any Customer Data, in the course of providing the Service. Biller, not Invoice Cloud, shall have sole responsibility for the accuracy, quality, integrity, legality, and reliability of, and obtaining the intellectual property rights to use and process all Customer Data. In the event this Agreement is terminated, Invoice Cloud will make available to Biller a file of the Customer Data (to the extent that Invoice Cloud is permitted to provide pursuant to applicable law and PCI DSS), within 30 days of termination of this Agreement (or at a later time if required by applicable law), if Biller so requests at the time of termination. Invoice Cloud will retain Customer Data for a period from its creation for the time frame that is listed in the Biller Order Form under “Data Retention.” If Biller elects to upload or otherwise transfer any Customer Data created prior to the Go Live Date (“Historical Data”) to the Services during Implementation or anytime thereafter, such upload shall be subject to Invoice Cloud’s then-current requirements and will incur additional fees, which shall be agreed to in writing by both parties prior to any such Historical Data upload or transfer. Invoice Cloud reserves the right to remove and/or delete remaining Customer Data no less than 60 days after termination or expiration except as prohibited by applicable law or in the event of exigent circumstances.

4. Confidentiality / Intellectual Property Ownership. Invoice Cloud agrees that it may be furnished with or otherwise have access to Customer Data that the Biller’s customers consider confidential. Invoice Cloud agrees to secure and protect the Customer Data in a manner consistent with the maintenance of Invoice Cloud’s own Confidential Information, using at least as great a degree of care as it uses to maintain the confidentiality of its own confidential information, but in no event use less than commercially reasonable measures. Invoice Cloud will not sell, transfer, publish, disclose, or otherwise make available any portion of the Customer Data to third parties, except as permitted under this Agreement or required to perform the Service or otherwise required by applicable law.

Invoice Cloud (and its licensors, where applicable) owns all right, title and interest, including all related Intellectual Property Rights, in and to the Invoice Cloud Technology, the Content and the Service and any enhancement requests, feedback, integration components, suggestions, ideas, and application programming interfaces, recommendations or other information provided by Biller or any other party relating to the Service. In the event any such intellectual property rights in the Invoice Cloud Technology, the Content or the Service do not fall within the specifically enumerated works that constitute works made for hire under applicable copyright laws or are deemed to be owned by Invoice Cloud, Biller hereby irrevocably, expressly and automatically assigns all right, title and interest worldwide in and to such intellectual property rights to Invoice Cloud. The Invoice Cloud name, the Invoice Cloud logo, and the product names associated with the Service are trademarks of Invoice Cloud or third parties, and no right or license is granted to use them.

Biller agrees that during the course of using or gaining access to the Service (or components thereof) it may be furnished with or otherwise have access to information that Invoice Cloud considers to be confidential including but not limited to Invoice Cloud Technology, the Agreement, customer and/or prospective customer information, product features and plans, the marketing/sales collateral, pricing and financial information of the parties which are hereby deemed to be Invoice Cloud Confidential Information, or any other information that by its very nature constitutes information of a type that any reasonable business person would conclude was intended by Invoice Cloud to be treated as 131
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proprietary, confidential, or private (the “Confidential Information”). Biller agrees to secure and protect the Confidential Information in a manner consistent w
ith the maintenance of Invoice Cloud’s rights therein, using at least as great a degree of care as it uses to maintain the confidentiality of its own confidential information, but in no event use less than reasonable efforts. Biller will not sell, transfer, publish, disclose, or otherwise make available any portion of the Confidential Information of the other party to third parties (and will ensure that its employee and agents abide by the requirements hereof), except as expressly authorized in this Agreement or otherwise required by applicable law.

5. Billing. Invoice Cloud fees for the Service are provided on the Biller Order Form. Invoice Cloud's fees are exclusive of all taxes, levies, or duties imposed by taxing authorities. Invoice Cloud may assess and/or collect such taxes, levies, or duties against Biller and Biller shall be responsible for payment of all such taxes, levies, or duties, excluding only United States (federal or state) taxes based solely on Invoice Cloud's income. All payment obligations are auto debited from the Biller Bank Account, unless otherwise agreed in writing, and are non-cancellable, and all amounts or fees paid are non-refundable. Unless Invoice Cloud in its discretion determines otherwise, all fees will be billed in U.S. dollars. If Biller believes Biller’s bill or payment is incorrect, Biller must provide written notice to Invoice Cloud within 60 days of the earlier of the invoice date, or the date of payment, with respect to the amount in question to be eligible to receive an adjustment or credit; otherwise such bill or payment is deemed correct. Invoice Cloud reserves the right to modify pricing with respect to applicable fees to be paid under this Agreement, at any time upon thirty days written notice to Biller: a) based on increases incurred by Invoice Cloud on Network Fees from credit card processers, bank card issuers, payment associations, ACH and check processers; or b) if, during the Term, the average credit card payment processed by Invoice Cloud for any three (3) consecutive month period exceeds 110% of the Average Credit Card Transaction $ specified on the corresponding Invoice Parameter Sheet(s), to the extent that Invoice Cloud incurs increases in Network Fees. Invoice Cloud, on at least 30 days written notice to Biller, may also increase any or all fees referenced in the Biller Order Form (including any Invoice Parameter Sheets), by no more than the greater of CPI for the preceding period or 5%, provided, however, that such increase may not apply during the first year after the execution date of the Biller Order Form and may not occur more than once per year thereafter.

6. Term and Termination. The initial term of this Agreement shall commence as of the execution date of the Biller Order Form and continue for a period of three (3) years after the Go Live Date (“Initial Term”), and will automatically renew for each of additional successive one (1) year terms (“Renewal Term”) unless terminated as set forth herein. “Term” as used herein shall mean the Initial Term and any Renewal Term.

This Agreement may be terminated by either party effective at the end of the Initial Term or any Renewal Term by such party providing written notice to the other party of its intent not to renew no less than ninety (90) days prior to the expiration of the then-current term. Additionally, this Agreement may be terminated by either party with cause in the event of a material breach of the terms of this Agreement by the other party and the breach remains uncured for a period of 30 days following receipt of written notice by the breaching party. Upon any early termination of this Agreement by Invoice Cloud as a result of breach, Biller shall remain liable for all fees and charges incurred, and all periodic fees owed through the end of the calendar month following the effective date of termination. Upon any termination or expiration of this Agreement, Biller’s password and access will be disabled and Biller will be obligated to pay the balance due on Biller’s account. Biller agrees that Invoice Cloud may charge such unpaid fees to Biller’s Debit Account or credit card or otherwise invoice Biller for such unpaid fees.

7. Invoice Cloud Responsibilities. Invoice Cloud represents and warrants that it has the legal power and authority to enter into this Agreement.

Invoice Cloud warrants that the Service will materially perform the functions that the Biller has selected on the Biller Order Form and the Statement of Work, attached hereto and incorporated herein by reference (the “Statement of Work”), under normal use and circumstances, and that Invoice Cloud shall use commercially reasonable measures with respect to Customer Data to the extent that it retains such, in the operation of the Service; provided, that the Biller shall maintain immediately accessible backups of the Customer Data (to the extent that Biller is permitted pursuant to applicable law and PCI-DSS standards). In addition, Invoice Cloud will, at its own expense, as the sole and exclusive remedy with respect to performance of the Service, correct any Transaction Data to the extent that such errors have been caused by Invoice Cloud or by malfunctions of Invoice Cloud’s processing systems.

8. Limited Warranty. EXCEPT AS PROVIDED IN SECTION 7, THE SERVICE AND ALL CONTENT AND TRANSACTION DATA IS

PROVIDED WITHOUT ANY EXPRESS, OR IMPLIED WARRANTY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED

WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARE

HEREBY DISCLAIMED TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW BY INVOICE CLOUD AND ITS LICENSORS AND PAYMENT PROCESSORS. INVOICE CLOUD AND ITS LICENSORS AND PAYMENT PROCESSORS DO NOT

REPRESENT OR WARRANT THAT (A) THE USE OF THE SERVICE WILL BE UNINTERRUPTED OR ERROR-FREE, OR OPERATE

IN COMBINATION WITH ANY OTHER HARDWARE, SOFTWARE, SYSTEM OR DATA, (B) THAT THE SERVICE WILL NOT

EXPERIENCE DELAYS IN PROCESSING OR PAYING, OR (C) THE SERVICE WILL MEET REQUIREMENTS WITH RESPECT TO SIZE OR VOLUME. Invoice Cloud's service may be subject to limitations, delays, and other problems inherent in the use of the internet and electronic communications. Invoice Cloud is not responsible for any delays, delivery failures, or other damage resulting from such problems.

9. Biller’s Responsibilities. Biller represents and warrants that it has the legal power and authority to enter into this Agreement. Biller is responsible for all activity occurring under Biller’s accounts and shall abide by all applicable laws, and regulations in connection with Biller’s and/or its customers’ and/or any payers’ use of the Service, including those related to data privacy, communications, export or import of data and the transmission of technical, personal or other data. Biller represents and warrants that Biller has not falsely identified itself nor provided any false information to gain access to the Service and that Biller’s billing information is correct. Biller shall: (i) notify Invoice Cloud immediately of any unauthorized use of any password or account or any other known or suspected breach of security; (ii) report to Invoice 132
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Cloud and immediately stop any copying or distribution of Content that is known or suspected to be unauthorized by Biller or Biller’s Users; and (iii) obtain
consent from Biller’s customers and payers to receive notifications and invoices from Invoice Cloud. Invoice Cloud is not responsible for any Biller postings in error due to delayed notification from credit card processors, ACH, bank and other related circumstances.

Biller agrees and acknowledges that in the event that Biller has access to, receives from, creates, or receives protected health information, or Biller has access to, creates, receives, maintains or transmits on behalf of electronic protected health information (as those terms are defined under the privacy or security regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and Subtitle D of the Health Information Technology for Economic and Clinical Health Act provisions of the American Recovery and Reinvestment Act of 2009 (“ARRA”), during the performance under this A greement, it will comply with all such law, regulations and rules related thereto.

Biller is required to ensure that it maintains a fair policy with regard to the refund, return or cancellation of payment for services and adjustment of Transactions.

Biller is also required to disclose all refund, return and cancellation policies to Invoice Cloud and any applicable payment processors and Biller’s Customers, as requested. Any change in a return/cancellation policy must be submitted to Invoice Cloud, in writing, not less than 21 days prior to the effective date of such change. If Biller allows or is required to provide a price adjustment, or cancellation of services in connection with a Transaction previously processed, Biller will prepare and deliver to Invoice Cloud Transaction Data reflecting such refund/adjustment within 2 days of resolution of the request resulting in such refund/adjustment. The amount of the refund/adjustment cannot exceed the amount shown as the total on the original Transaction Data. Biller may not accept cash or any other payment or consideration from a Customer in return for preparing a refund to be deposited to the Customer’s account; nor may Biller give cash/check refunds to a Customer in connection with a Transaction previously processed by credit card, debit card, ACH, or other electronic payment method, unless required by applicable law. Biller shall cooperate with Invoice Cloud to effect a timely Implementation by Biller allocating sufficient and properly trained personnel to support the implementation process and fully cooperating with Invoice Cloud and by securing the cooperation of Biller’s software and service providers and providing to Invoice Cloud the information required to integrate with Biller’s billing, CIS and other applicable systems. Biller agrees to participate in scheduled status meetings and provide regular written updates to Invoice Cloud detailing the current status of Implementation efforts, any identified issues or delays, and anticipated next steps, no less frequently than every thirty (30) days starting from the Effective Date until the Implementation is complete and Biller’s Go Live Date occurs. Failure to participate in such meetings or to respond to Invoice Cloud’s requests for status updates may result in an adjustment of the Implementation schedule or the imposition of additional fees at Invoice Cloud’s sole and absolute discretion. Failure by Biller to make material Implementation progress or respond to Invoice Cloud’s requests for status updates for a period exceeding ninety (90) days shall constitute a material breach of this Agreement.

10. Indemnification. Invoice Cloud shall indemnify and hold Biller and Biller’s employees, attorneys, and agents, harmless from any losses, liabilities, and damages (including, without limitation, Biller’s costs, and reasonable attorneys’ fees) arising out of: (i) failure by Invoice Cloud to implement commercially reasonable measures against the theft of Customer Data; or (ii) its total failure to deliver funds processed by Invoice Cloud as required hereunder (which relates to payments due from Invoice Cloud for Transaction data). This indemnification does not apply to any claim or complaint relating to Biller’s failure to resolve a payment dispute concerning debts owed to Biller or Biller’s negligence or willful misconduct or violation of any applicable agreement or law.

11. Fees. Invoice Cloud will charge Biller and/or Biller’s Customers the payment transaction fees and other fees as set forth on the Biller Order Form. In addition, Invoice Cloud will charge Biller for the initial platform setup, configuration, implementation and integration of Invoice Cloud’s Services with Biller’s internal or external system(s) (the “Implementation”). The scope of Implementation work and corresponding fees are set forth in: (i) the Statement of Work (“SOW”) entered into by the parties, the terms of such SOW being incorporated herein and made a part hereof by this reference, and (ii) the “Implementation Fee Details” section of the Biller Order Form. Where Biller requests any changes or additions to the Implementation or other work described in the SOW after the SOW has been fully executed by the parties, Invoice Cloud, in its sole and absolute discretion, reserves the right to charge Biller for such changes and additions, and such changes and additions and charges associated therewith must be agreed upon by the parties in advance in a written Change Order Form. Subject to Biller’s prior written approval, Biller shall be responsible for reimbursing all reasonable travel-related expenses incurred by Invoice Cloud in connection with performing Invoice Cloud’s obligations under the SOW, in accordance with the terms of Invoice Cloud’s then-current travel and expense policy.

12. Limitation of Liability. INVOICE CLOUD’S AGGREGATE LIABILITY SHALL BE UP TO AND NOT EXCEED THE AMOUNTS ACTUALLY PAID BY AND/OR DUE FROM BILLER IN THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH CLAIM. IN NO EVENT SHALL INVOICE CLOUD AND/OR ITS LICENSORS BE LIABLE TO

ANYONE FOR ANY INDIRECT, PUNITIVE, SPECIAL, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL (INCLUDING LOSS OF

DATA, REVENUE, PROFITS, USE OR OTHER ECONOMIC ADVANTAGE) DAMAGES ARISING OUT OF, OR IN ANY WAY

CONNECTED WITH THE SERVICE, EVEN IF THE PARTY FROM WHICH SUCH DAMAGES ARE BEING SOUGHT OR SUCH PARTY'S LICENSORS HAVE BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. Certain states and/or jurisdictions do not allow the exclusion of implied warranties or limitation of liability for incidental, consequential or certain other types of damages, so the exclusions set forth above may not apply to Biller.

13. Export Control. The Biller agrees to comply with United States export controls administered by the U.S. Department of Commerce, the United States Department of Treasury Office of Foreign Assets Control, and other U.S. agencies. 133
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14. Notice. Either party may give notice by electronic mail to the other party’s email address (for Biller, that address on record on the Biller Order Form) or by written communication sent by first class mail or pre-paid post to the other party’s address on record in Invoice Cloud’s account information for Biller, and for Invoice Cloud, to Invoice Cloud, Inc., 30 Braintree Hill Office Park, Suite 101, Braintree, MA 02184 Attention: Client Services or [email protected]. Such notice shall be deemed to have been given upon the expiration of 48 hours after mailing or posting (if sent by first class mail or pre-paid post) or 12 hours after sending (if sent by email).

15. Assignment. This
Agreement may not be assigned by either party without the prior written approval of the other party, but may be assigned without such party’s consent to (i) a parent or subsidiary, (ii) an acquirer of assets, or (iii) a successor by merger. Any purported assignment in violation of this section shall be void.

16. Insurance.

Invoice Cloud agrees to maintain in full force and effect during the Term of the Agreement, at its own cost, the following coverages:
a. Commercial General or Business Liability Insurance with minimum combined single limits of One Million ($1,000,000) each occurrence and Two Million ($2,000,000) general aggregate. b. Umbrella Liability Insurance with minimum combined single limits of Five Million ($5,000,000) each occurrence and Five Million ($5,000,000) general aggregate.
c. Automobile Liability Insurance with minimum combined single limits for bodily injury and property damage of not less than One Million ($1,000,000) for any one occurrence, with respect to each of the Invoice Cloud’s owned, hired or non-owned vehicles assigned to or used in performance of the Services.
d. Errors and Omissions Insurance (Professional Liability and Cyber Insurance) with limits of liability of at least One Million Dollars ($1,000,000) per claim and in the aggregate.

17. Immigration Laws. Invoice Cloud represents and warrants that it has complied and will comply with all applicable immigration laws with respect to the personnel assigned to the Biller.

18. Beta Products. In the event that there is any functionality labelled “Beta” on the Biller Order Form, such functionality is provided “AS IS”

WITHOUT ANY EXPRESS, OR IMPLIED WARRANTY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF

MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARE HEREBY DISCLAIMED

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW BY INVOICE CLOUD AND ITS LICENSORS AND PAYMENT PROCESSORS. INVOICE CLOUD’S AGGREGATE LIABILITY WITH RESPECT TO SUCH FUNCTIONALITY SHALL BE UP TO AND NOT EXCEED $10.

19. General.
(a) With respect to agreements with municipalities, localities or governmental authorities, this Agreement shall be governed by the law of the state wherein such municipality, locality or governmental authority is established, without regard to the choice or conflicts of law provisions of any jurisdiction. With respect to Billers who are not with municipalities, localities or governmental authorities, this Agreement shall be governed by Massachusetts law and controlling United States federal law, without regard to the choice or conflicts of law provisions of any jurisdiction. No text or information set forth on any other purchase order, preprinted form or document (other than a Biller Order Form and any add on Biller Order Form, if applicable), and no documentation (including any Implementation planning documents) except as specifically referenced in this Biller Agreement, shall modify, add to or vary the terms and conditions of this Agreement. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then such provision(s) shall be construed, as nearly as possible, to reflect the intentions of the invalid or unenforceable provision(s), with all other provisions remaining in full force and effect. No joint venture, partnership, employment, or agency relationship exists between Biller and Invoice Cloud as a result of this agreement or use of the Service.

The failure of either party to enforce any right or provision in this Agreement shall not constitute a waiver of such right or provision unless acknowledged and agreed to by Invoice Cloud in writing. All rights and obligations of the parties in Sections 4, 6, 10, 12, 14, 18 and 19(a) and (b) shall survive termination of this Agreement. This Agreement, together with any applicable Biller Order Form, comprises the entire agreement between Biller and Invoice Cloud and supersedes all prior or contemporaneous negotiations, discussions or agreements, whether written or oral between the parties regarding the subject matter contained herein. Biller agrees that Invoice Cloud may disclose the fact that Biller is a customer of Invoice Cloud in Invoice Cloud’s marketing, promotional, and sales materials, including without limitation in press releases, case studies, testimonials, customer lists, and presentations, provided that any case studies or press releases that explicitly identify Biller by name shall be subject to Biller’s prior written approval. Where this Agreement is incorporated into, embedded in or otherwise made a part of a separate agreement between Invoice Cloud, Biller and a third party service provider (“Third Party Agreement”), and such Third Party Agreement is terminated or expires, Biller and Invoice Cloud agree that the terms and conditions of this Agreement shall survive and 134
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remain in effect as between Biller and Invoice Cloud until this Agreement expires or is otherwise terminated by either Biller or Invoice Cloud in accordance with the terms herein.
(b)
Additional terms and conditions and definitions applicable to this Agreement and the Biller Order Form are found at www.invoicecloud.com/biller-terms-and-conditions (the “Biller T+C”) and are agreed to by Invoice Cloud and Biller. The Biller T+C are hereby incorporated herein and made a part hereof by this reference. 135
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Contents
Introduction ... ............................................................................................................................................... 2 Service Summary ........................................................................................................................................... 2

1. Compliance with Industry and Security Standards ................................................................................. 2

2. Digital Payment Capabilities ................................................................................................................ 2

3. Invoice Cloud Customer Portal ............................................................................................................ 3

4. Invoice Cloud Biller Portal ................................................................................................................... 4

5. Email Notifications ............................................................................................................................. 5

6. Invoice Type Configuration ................................................................................................................. 6 Service Implementation ................................................................................................................................ . 6

7. Project Management .......................................................................................................................... 6

8. Invoice Cloud Resources ..................................................................................................................... 6

9. Invoice Cloud Responsibilities ............................................................................................................. 7

10. Biller Responsibilities .......................................................................................................................... 8

11. Joint Responsibilities .......................................................................................................................... 9

13. Draft Implementation Phases and Milestones ..................................................................................... 10

14. Implementation-Related Fees ........................................................................................................... 10

15. System Integration .......................................................................................................................... 11

16. Support & Training........................................................................................................................... 11

17. Marketing ........................................................................................................................................ 12 Signature Page ............................................................................................................................................ 14 Appendix A – Implementation Scope and Service Modifications .......................................................................... 1 Appendix B – System Integration Requirements ............................................................................................... 1 Appendix C – Project Deliverables ................................................................................................................... 1

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Introduction
The Invoice Cloud Electronic Bill Presentment and Payment (EBPP) S aaS Platform ( the Service) provides City of Martinez, California (Biller) and Biller’s customers with inbound digital payment capabilities, such as searching for and paying invoiced and non -invoiced items with credit cards, electronic checks, and other requested payment types, in a public cloud environment that complies with PCI security standards . Invoice Cloud also provides outbound payment capabilities for insurance claims, agent commissions, and premium refund payments.

Service Summary
Th
e business benefits and key capabilities of the Service are summarized below.

1. Compliance with Industry and Security Standards
Invo
ice Cloud com plies with current Payment Card Industry (PCI) standards, the Cardholder Information Security Program (CISP) regulations, and National Automated Clearinghouse Association (NACHA) rules and guidelines, in order to protect the privacy and security of cardholder data. a. PCI DSS 4.0—Invoice Cloud’s compliant storage for customer information is certified by Visa and MasterCard. Data is encrypted in-flight via SSL. All confidential information is handled in accordance with PCI standards.
b. Software as a Service (SaaS) Architecture —The Service is architected and hosted in a secure Azure public cloud tenant, i.e., EBPP databases and servers are hosted offsite from Billers.

2. Digital Payment Capabilities
Inbo
und digital paym ent capabilities include, but are not limited to:
a. Support for multiple payment sources like the Invoice Cloud Virtual Site for guest payments; the Invoice Cloud Customer Portal for registered users; the Invoice Cloud Biller Portal for administrators and CSRs; Interactive Voice Response (IVR) for phone call payments; Online Bank Direct (OBD) , for Billers to electronically import ACH payments initiated from bank bill sites ; Point of Sale (POS) terminals, for payments made at a CSR or Agent’s office; and an Express Payments feature, where a customer clicks a payment link in a notification email or SMS sent by the Service. b. Payments can also be made when a Biller integrates EBPP web services with their CIS or core billing system portal to render Invoice Cloud payment pages via iFrame or a Redirect. c. Billers decide what payment sources listed above are permitted and configured. Billers decide whether to enable the Pay by Text option. And Billers decided whether to enable Paperless and Autopay billing per invoice type.
d. Customers with registered accounts that have scheduled payment s or are registered for AutoPay receive email notifications from the Service of pending payments. Once a payment is made, a payment confirmation email is sent.
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e. Cus
tomers with registered accounts who elect paperless billing are automatically placed back on paper billing if their email address is undeliverable. The Biller is also notified via email when email addresses are undeliverable.
f. The Service complies with the Federal E-Signature Act for Paperless billing and AutoPay by requiring a customer to respond to a post-enrollment confirmation email for each option. g. The Biller can specify allowed payment types, including Credit Cards (e.g., Visa, MasterCard, American Express, and Discover), Electronic Checks (e.g., ACH, eCheck, EFT), Point of Sale (POS), PayPal (e.g., PayPal, PayPal Credit, Venmo), and more.

Outbound digital payment capabilities include:
a. Support for distributing outbound payments, such as claims payments, agent commissions, and premium refunds for Biller. Digital payments can help Biller drive down costs associated with making these payments via paper checks.

3. Invoice Cloud Customer Portal
The
Invoice Cloud Cus tomer Portal is the UI/UX for customers with registered accounts to manage their payment options, schedule payments, search for and pay invoiced and non -invoiced items, and more . Key capabilities include:
a. Invoices (Bills) are presented electronically in a Biller branded portal. b. Customers who register their accounts with Invoice Cloud receive login credentials via email.

Alternatively, automatic account registration is a feature of Invoice Cloud’s SAML SSO web service. c. Customers with registered accounts can access features such as making payments, reviewing payment history, scheduling payments, setting up AutoPay, etc. The Biller can specify the authentication method required for registration.
d. The Biller can enable an option for customers without registered accounts to make one-time payments in a Guest Payment or “Virtual Site”.
e. The Service includes shopping cart functionality.
f. A customer with multiple accounts, e.g., Taxes and Utility, can “link” the accounts under a single registration. Then, upon signing into the portal, they can select the account they require for a payment task.
g. For each invoice type, a customer with a registered account can specify a default payment type. h. The Bill Presentment feature displays a copy of a customer’s bill (PDF format) or renders a bill copy using an HTML template.
i. Customers with registered accounts can access twenty -four (24) months of rolling account , invoice, and payment history.
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4. Invoice Cloud Biller Portal
The
Invoice Cloud Biller Portal is the UI/UX where authorized Bil ler administrators and CSRs access reports ; manage registered users; search for customers, invoices, payments, and data exchange files ; manage reconciliations , the Online Bank Direct service, and outbound campaigns ; initiate payments or credits; log in as a customer with the customer’s authorization, and more. Key capabilities include:
a. Users can log in as a customer with the customer’s authorization and assist customers with certain actions like making a payment. An audit log is maintained on whoever assited a customer with making a payment on their behalf and the source.
b. Users can block future customer payments as well as restrict payment types. c. Users with the highest permission level can manage roles and other portal users. Role-based feature permissions ensure adherence to the principle of least privilege, i.e., users should only have access to the minimal set of features required to perform assigned work, such as viewing data, creating reports, resending email notices, processing payments, credits or refunds, editing email templates, and more. d. Biller can configure which administrative and request notifications are automatically sent to selected employees. This feature allows different departments to receive targeted notifications in a timely manner, including:
• ACH Reject Notifications • Paperless Customer Email Bounce Daily Report • Batch Close Notifications • Request System Notifications • Status Notifications (notifications of planned
ou
tages, new features, etc.)

• Daily Management Report
• File Processing Notifications
• Month End Billing Invoice
e. Biller can configure and customize the handling of customer accounts and payments like:
• Allo
wing AutoPay and scheduled payments
• Allowing customers to update their phone or mailing address through the Invoice Cloud Customer Portal
• Allowing customers to pay less or more than the balance due based on receivable type • Updating Refund Policy description
• Updating customer service phone number
f. Biller can access a selection of pre- configured reports for daily, monthly, or date range activity. Most reports can be exported to Excel files or scheduled for download as a custom report, as indicated by an asterisk (*) in the report name. All stored payment data is truncated on all reports. Available reports currently include:
• Search Customers* • View Scheduled Payments*
• Search Invoices • Invoice File History
• Search Payment trans actions* • Import Errors
• Monthly Summary • Daily Payments Received*
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• Registration Report* • Total Outstanding Invoices
• AutoPay Report* • Email Notification Summary
• Paperless Report* • Email Statistics
• Data Synchronization History • Email Tracking
• EFT/ACH Rejects* • Bounced Email Report

5. Email Notifications
The
Service provi des customizable invoice -type-specific email templates to use for activity notifications . The templates are customized in the Invoice Cloud Biller Portal using a Word style editor and support the insertion of hyperlinks (e.g., websites, electronic documents, bill inserts, etc.) and select fields included in Biller’s invoice data updates.
a. Up to t hree (3) email notifications can be scheduled. The first notification is based on the days since the invoice ’s due date . The second and third notifications are only sent to customers with outstanding balance s, not those with a scheduled payment or who signed up for AutoPay. b. At Biller’s discretion, email notifications can be delivered for any event below . • First Invoice Email Notification
• Third Invoice Email Notification
• De
clined AutoPay Transaction
• Declined Scheduled Payment
Notification
• AutoPay Registration Notification
• ACH Reject/Chargeback Notices
(with reason codes and
descriptors)
• Scheduled Payment Confirmation
• Scheduled Payment Reminder
• Online Bank Direct Payment
Receipt
• Linked Accounts Second Notice
Notification
• AutoPay Off Confirmation
• Multiple Registered Customers
Welcome Email
• Recurring Scheduled Payment
Canceled
• Second Invoice Email Notification
• Payment Transaction Receipt
• Lat
e Fee Email Notification
• Registered Customer Welcome Email
• Paperless Registration Notification
• Credit Card Expiration Notification
• AutoPay Reminder Notification
• Paperless Off Confirmation
• Linked Accounts First Notice Notification
• Linked Accounts Third Notice Notification
• Conveyed Customer Notification
• Recurring Scheduled Payment Confirmation
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6. Invoice Type Configuration
The
Service provides exten sive invoice type-specific customizations. Each invoice type can accept different payment types, customizations, and business rules. The invoice parameters are reviewed and finalized in the Implementation engagement.

For example, for each invoice type, Biller can:
a. Allow partial payments, overpayments, full balance only, and late fees. b. Allow payments beyond the due date.
c. Allow multiple payment types on the same invoice, even when partial payments are allowed.

Credit/debit cards and eChecks (ACH) can be run separately , and unlimited remittance types can be used. For example, a customer can pay a portion of an invoice from their checking account, another portion with a Visa credit card, and the remainder with a second credit card of any type.

Service Implementation
Invo
ice Cloud’s pro ject management plan for Biller’s Service Implementation is detailed below.

7. Project Management
Invo
ice Cloud adheres to PMI p roject management best practices. Our approach and tools include:
a. Managing project phases with clear-cut milestones and deliverables. b. Using Smartsheet for collaborative project scheduling and task management. c. Tracking risks, actions, issues, and decisions with a RAID log. d. Assigning dedicated resources with the requisite experience and competencies.

8. Invoice Cloud Res ources
Invoice Cloud assigns an Implementations Manager (IM) on ea ch Implementation project. The IM is Biller’s primary contact and coordinates all internal and external project stakeholders and participants according to plan. The IM also coordinates the drafting, review, update, and distribution of project artifacts, including, but not limited to:
a. New Biller Questionnaire—documents parameters, rules, settings, and features needed to set up and initiate the Service.
b. Project Timeline—Project schedule and milestones.
c. Testing Plans—Any required system integration (SIT) and user acceptance test (UAT) plans. d. Training Plans—Required plans to train future users of the Service.

However, complex implementations are led by an Enterprise Project Manager (PM), with the Implementation Manager focused on providing subject matter expertise and configuration and onboarding management. 141
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If a
“C ustom Integration” with Biller’s CIS or core billing system is required , an Integrations Manager (INM) working closely with a Solutions Engineer (SE) leads a n integration requirements discovery, design, and development effort. However, an Integrations Manager is typically not required if Biller’s CIS or core billing system is going to be integrated with Invoice Cloud’s EBPP Platform using a “Standard Integration”—a pre-built and tested integration solution. Invoice Cloud has developed and deployed many standard integrations, including Munis CIS integrations (for the government and utilities market) and a Guidewire accelerator (for the insurance market).

9. Invoice Cloud Responsibilities
Invo
ice Cloud responsibilities include:
a. Proj
ect Management & Planning
• Assign a PM or IM to oversee the Implementation engagement. • Develop a detailed project plan, including timelines, milestones, and resource allocation. • Conduct regular project status meetings and provide status reports to Biller. b. Solution Design & Architecture
• Conduct a requirements analysis to understand Biller’s business requirements. • Architect a solution aligned with Biller’s requirements and best practices. • Provide a Solution Design Document (SDD) for review, revision, and approval , where applicable.
c. Configuration & Customization
• Configure the software according to the agreed specifications. • Ensure that all configurations are aligned with the solution architecture. d. Data Migration
• Provide requirements and guidance to facilitate legacy data migration. • Make commercially reasonable efforts to ensure data quality and consistency during migration, subject to the accuracy and completeness of Biller-supplied data. • Test and validate the migrated data with the customer. e. Testing & Quality Assurance
• Conduct system, integration, and Internal Acceptance Testing (IAT) before the Go Live Date. • Resolve material defects or issues identified during testing within the agreed timeline. • Draft User Acceptance Testing (UAT) plan.
f. Training & Documentation
• Provide training materials and sessions for Biller’s end-users and administrators. • Provide user manuals, technical documentation, and other supporting documents. g. Go Live Support & Post-Go Live Support
• Provide remote support during the Go Live phase to address issues. • Facilitate post-Go Live support to resolve any remaining issues. 142
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10. Biller Responsibilities
Bille
r responsibilities include:
a. Pro
ject Management, Resources & Coordination
• Assign a project manager or primary point of contact. • Provide timely feedback on project plans, milestones, and deliverables. • Consider including Invoice Cloud and other project participants, e.g., CIS or core billing system vendor, system integrator, in planning sessions if the Service deployment is part of a broader initiative, such as a new CIS or core billing system implementation. • Dedicate sufficient and professionally trained personnel to support the Implementation process and its use of the Service in compliance with all applicable laws. • Collaborate on and agree to a joint project schedule and make commercially reasonable efforts to stay on task; Biller should endeavor to have their other vendors, e.g., system integrator, print vendor, etc., do the same.
• Assign an empowered executive sponsor to whom issues can be escalated for resolution. • Biller must ensure that their other software and service providers , e.g., CIS or core billing system vendor or system integrator, provide Invoice Cloud with the information and deliverables required according to the plan to achieve the target Go Live Date. b. Requirements Gathering & Documentation
• Provide clear and complete requirements, including business workflows and data requirements. • Review, approve, and formally sign off on solution designs and configurations provided by the vendor to confirm alignment with project requirements.
c. Change Requests
• Submit change requests in writing for review. All change requests are subject to evaluation for potential impacts on project scope, timeline, and costs and require formal approval before implementation, and must be memorialized by the parties in writing by completing a Change Order Form signed by both parties.
d. Data Conversions
• Coordinate data exports from legacy payment systems for ACH, autopay, and user registration conversions.
• Perform necessary data cleansing and preparation for migration. e. Training & Change Management
• Ensure attendance of end-users in vendor-led training sessions. • Ensure that internal change management efforts are in place to support user adoption. f. User Acceptance Testing (UAT)
• Begin testing within a week from the initial delivery of the test platform from Invoice Cloud and make continuous efforts to complete testing.
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• Condu
ct UAT based on biller-supplied and Invoice Cloud-supplied test cases and report issues found to Invoice Cloud.
• Provide formal written sign- off upon successfully completing User Acceptance Testing (UAT) that the system meets agreed-upon requirements and is ready for final G o Live preparation.

Note that UAT is a collaborative milestone used to validate that the configured solution meets the functional requirements agreed upon in the Solution Design Document. The parties acknowledge and agree that UAT does not create termination rights under the Biller Agreement and shall not be viewed as nor constitute a form of formal contract acceptance. g. Go Live & Operational Readiness
• Confirm readiness for Go Live, including data migration, user access, and training completion. • Notify Invoice Cloud no less than 30 days before any change in the agreed Go Live Date. Send any changes to the Go Live Date to InvoiceCloud in writing so changes to internal resource allocation and scheduling can be made in advance.
• Launching the Service approximately two weeks after UAT. • Prepare internal support teams for post-Go Live support.

11. Joint Responsibilities
Jo
int responsibilities include:
a. Proj
ect Governance
• Establish and ensure the active participation of executive project stakeholders from the vendor and customer in the steering committee.
• Participate in joint project status meetings and reviews. b. Scope Management
• Collaborate to manage project scope, adjusting schedule and cost based on change requests. • Evaluate the impact of changes on timeline, cost, and resources. c. Risk Management & Issue Resolution
• Identify potential risks to the project timeline, quality, or budget. • Collaborate on mitigation strategies and promptly address issues as they arise. d. Integration with Third-Party Systems
• Jointly plan and manage any required integrations with third-party applications. • Collaborate on testing and troubleshooting of integrated systems.

These responsibilities help define clear expectations and ownership for each party involved in the Implementation project, minimizing misunderstandings and ensuring alignment of deliverables and timelines.

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12. Draft Implementation Phases and Milestones
Ph
ase 1 – Eng agement
• Project Kickoff
• Detailed Biller questionnaire
• Boarding Paperwork
• Sample Files Received
• Customer Training Overview
Phase 2 – Integration (if applicable)
• Discovery
• Integration Design
• Integration Development
• Systems Integration Testing (SIT)
• Approval and Release
Phase 3 – Implementation
• Virtual Site Configuration
• Biller User/Roles Setup
• Integration Coding
• IVR Setup
• Marketing Schedule Finalized
Phase 4 – Training & Testing
• Customer Training
• Internal Acceptance Testing (IAT)
• Customer Demonstration
• User Acceptance Testing (UAT)
• Go Live Date Confirmed
Phase 5 – Go Live Preparation
• Marketing Complete
• Customer Stakeholder Sign-off
• Production Data Loaded
• Post-Live Support Overview
• Biller Go Live!

13. Implementation-Rel ated Fees
During Implementation, Invoice Cloud will p rovide access to the Service, including one (1) production and one (1) test environment, with additional environments available for an additional fee . Access to these environment s is essential to many Implementation project tasks, including configuration, customization, system integration, testing, training, and other Go Live preparation tasks. In the event Biller has not gone live with the Services within the number of months set forth in the Biller Order Form, a monthly Pre Launch Hosting Fee will be assessed to continue providing these environments until the Go Live Date.

An Implementation Fee will be charged to cover the planning, configuration, integration support, testing coordination, and initial deployment services required to successfully implement the Service. This fee also covers the allocation of dedicated project resources, access to Implementation tools and environments, and delivery of best-practice onboarding tailored to Biller’s requirements. The Implementation Fee will be payable as outlined in the Biller Order Form payment schedule. Work on Implementation will not begin until Invoice Cloud receives the Implementation Fee, as set forth in the Biller Order Form.

Invoice Cloud reserves the right to charge , at its standard rates as provided below, for changes and additions to an approved Implementation scope or integration design and for cases where Biller or other vendors fail to meet 145
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agr
eed-upon project schedule commitments. Fees may also be incurred for any Implementation, or post - Implementation, Biller requests, including any of the following services:
a. Custom development and features not stated on the SOW, and change requests and modifications to existing platform functionality not stated in the SOW.
b. Required integration of new or additional CIS or core billing systems not stated in the SOW, including future Biller replacement or upgrade of its existing complementary software system(s). c. Changes to bill presentment (web and PDF templates), billing system integrations, and other Service components coded or configured to the Biller’s specifications after the Biller has signed off on the relevant specification or the Service is in production. d. Custom reports, custom data extracts, and other custom export files. e. Data conversion not listed in the SOW, or repetitive re-loading of data due to Biller error.

Invoice Cloud’s standard rates for work performed on changes or additions to Implementation or for Biller requests post-Implementation are $250 per hour for engineering work and $225 for consulting and project management. Invoice Cloud may charge additional fees for certain Biller requests, which shall be agreed to in writing by both parties prior to any work being performed on such requests.

14. System Integration
App
endix B details the data synchronization integration requirements between the Service and the Biller’s CIS or core billing system .

This SOW does not include detailed requirements for integrating the EBPP UI/UX pages with Biller’s CIS or core billing system portal. However, these will be discussed and documented during the Implementation project discovery phase . For whatever use cases are required, e.g., Biller’s Customer, CSR/Agent, Administrator, etc., an Invoice Cloud Solutions Engineer will provide Biller and System Integrator developers with the API coaching and support required to leverage the required EBPP Platform UI/UX web services.

15. Support & Training
a. Business Hours — Invoice Cloud’s business hours are Monday through Friday from 8:00 AM to 8:00 PM Eastern Standard Time (EST). Note: Biller Support hours are 8:00 AM to 8:00 PM EST. Support hours for Biller’s customers are 8:00 AM to 4:00 PM EST.
b. Help Desk — The Service will provide a helpdesk ticketing system for Biller within the Invoice Cloud Biller Portal to get help from the Invoice Cloud client support team. This tool will allow Biller to track and retain resolutions for historical reference.
c. Support for Biller’s Customers — Support is two-tiered, with Biller staff as the first line of support regarding account registration and billing questions. Issues with the Invoice Cloud service operation or incorrect credit card charges will be routed to Invoice Cloud Client Support via telephone or a Biller helpdesk ticket.
d. Biller Support —If Biller encounters an inquiry that it cannot resolve, Biller should create a helpdesk support ticket. Invoice Cloud Customer Support will address the issue and, if applicable, provide training 146
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to
Biller to allow the address of tickets in a timely matter, often within twenty-four (24) business hours.

Technical support is available during business hours.
• Routine Technical Support — Technical Support is available during business hours. The Biller may call customer support directly; however, the helpdesk ticketing system is encouraged as the preferred contact method. Invoice Cloud staff views all tickets as they are submitted and routes them to the appropriate person for resolution.
• Emergency After-Hours Support — The helpdesk service is monitored after business hours, and Invoice Cloud aims to address all emergency support issues within one (1) hour. An emergency support issue involves the system being down and inoperable and does not include payment issues. The Biller may request that an email notification be provided if the system is down and inoperable.
e. Service Enhancements — Most enhancements do not require action on the part of Biller. Upgrades, as agreed, are done at the Invoice Cloud server level, so there are no mandatory actions for Biller.

Enhancements do not affect support levels.
f. Biller Training — Biller staff will be guided in using the system through in- house training, documentation, remote live sessions, and access to our client support team. • All standard training will be done remotely. Invoice Cloud training includes our Customer Portal and the Invoice Cloud Biller Portal.
• Biller’s technical staff receives separate training on uploading bill files and other applicable processes.
• Biller will receive ongoing phone and Go -To-Meeting training during the first month of use at no additional cost.

16. Marketing
Invo
ice Cloud provides marketing support at no c harge for Billers to promote Invoice Cloud’s digital payment capabilities and user experiences to Biller’s customers.

Invoice Cloud’s marketing team will schedule a one (1) hour conference call to review best practices for promoting the Service. Sample templates for the items below will be provided with customizations available upon request. The marketing collateral that Invoice Cloud provides may include:
a. Bill Inserts
b. Newsletters
c. Envelope Teasers
d. Pay Button Link
e. Posters with Acrylic Stands for Payment Counters
f. Business “take-away” cards with QR code
g. Local cable/TV station announcement
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[SIGN
ATURE PAGE FOLLOWS]

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Signature Page
This SOW references ma ny products, services, and payment methods. However, only the specific products, services, and payment methods selected by City of Martinez, California, as outlined in the Biller Order Form, are included in the delivery.

IN WITNESS WHEREOF, the parties hereto have duly executed this SOW.

City of Martinez, California Invoice Cloud, Inc.

By: _______________________________ By: _______________________________ Printed Name: _____ ___________________ Printed Name: Kevin W. O’Brien Title: ___________ ____________________ Title: Chief Executive Officer Date: ___________ _________ Date: ____________________
9/16/2025
149

Appendi x A - Page 1

Appendix A – Impl ementation Scope and Service Modifications

150

A ppendix B - Page 1

Appendix B – Syste m Integration Requirements

App
endix B: Integration Supported Features

Modules & Features

Tyler Technologies - Munis

PRODUCTS
Invoice Types Utilities
EBPP Supported
Cloud IVR Connect Supported
Pay by Text Supported
Apple Pay Supported
Google Pay Supported
PayPal Supported
DATA EXCHANGE Method  Frequency
Invoices Batch File via SFTP Each Billing Cycle
Payments Batch File via SFTP Daily
AutoPay Flags Change Logs via SFTP Daily
Paperless Flags Change Logs via SFTP Daily
Account Balances Batch File via SFTP Daily
Block Payment Method (Credit/ACH) Manually via Biller Portal As Needed

INVOICE FILES
IC Translates file Supported
Historical Data (2 years shown online) Supported

BILL PRESENTMENT
PDF Extraction (Partial) Supported
Link to PDFs Preferred

BATCH CLOSE
Standard or Custom Custom

CUSTOM OPTIONS
Branded Biller Portal Supported
Branded Payer Portal Supported

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Appendix C – Pr oject Deliverables

App
endix C: Biller Deliverables

Deliverable
Sample Invoice File
Sample Adjustment File
Sample Payment File
Sample Images of Bills
Auto Pay Conversion data (if applicable)
Paperless conversion data (if applicable)

152
Biller Order Form

SALES INFORMATION
IC Sales Rep Reed Pelliconi Vertical Utility
Order Date 3/10/2026 [email protected] Billing Software Tyler - Munis

BILLER INFORMATION
Ownership Type Government Phone (925) 372-3500 Fax
Full Legal Name The City of Martinez, California Website URL https://www.cityofmartinez.org/ Address 1 525 Henrietta Street Bus. Open Date
Address 2 Federal Tax ID
City Martinez *Federal Tax ID and Legal Name must match on all documents State CA ZIP 94553 Array

BILLER CONTACT
Primary Contact Name Michael Chandler
Phone (925) 372-3500
Email Address [email protected]

SIGNING AUTHORITY
Name Michael Chandler Title City Manager
Phone (925) 372-3500 Fax Email Address [email protected]

BILLER BANK ACCOUNT (FOR INVOICE CLOUD AND NETWORK FEES, AND AS PROVIDED IN THE BILLER AGREEMENT) Note: Must include voided business check or bank letter for each unique accou nt Billing Method Direct Debit
Routing # Last 4 Acct #

PAYMENT METHODS ACCEPTED
Payment Methods [American Express] [VISA/Mastercard/Discover] [PayPal] [ACH/EFT]

BILLER PRICING (see attached Invoice Type Parameter Sheet(s) for invoice-type-specific pricing ; see also Implementation Fee Details section below for additional pricing information)**
Description Interval Cost Type Cost
PayPal Brands - Chargeback Fee (PayPal Brands) Per Transaction Fixed ($) $15.00

Invoice Presentment For Paperless Customers Per Transaction Fixed ($) $0.10

Credit Card - Chargeback Fee Submitter Per Transaction Fixed ($) $15.00

EFT - ACH Reject Fee Submitter Per Transaction Fixed ($) $15.00

Biller Portal Access Fee Monthly Fixed ($) $0.00

HARDWARE
Card Reader Type EMV Quantity 6 Cost per Reader $30.00
Card Reader PAX A80 Billing Interval Monthly
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Shipping Address
(if
different than location
address)

DATA RETENTION
Months to Keep 24 *Additional Fees apply if greater than 24 months

IMPLEMENTATION FEE DETAILS
Fee Description Interval Cost

Pre Launch Hosting Fee** Amount Months until Pre Launch Hosting Fee Starts **Biller is responsible for paying the Pre Launch Hosting Fee Amount if the number of months listed in "Months until Pre Launch Hosting Fee Starts" elapses following the Effective Date and Biller's Go Live Date has not occurred. Once in effect, the Pre Launch Hosting Fee Amount will be charged to Biller each month until the Go Live Date occurs.

NOTES/SPECIAL HANDLING
[SIGNATURE PAGE FOLLOWS]
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CERTIFICATION AND AGREEMENT

A. By s
igning below, the Biller hereby ratifies its authorization for Invoice Cloud, Inc. ("Invoice Cloud") to execute debit/credit entries to the Biller Bank Account(s) indicated above at the depository financial institution(s) named above and to debit/credit the same such account(s). The Biller acknowledges that the origination of ACH transactions to its account(s) must comply with the provisions of U.S. law. This authority is to remain in full force and effect until (i) Invoice Cloud has received written notification (by electronic or U.S. mail) from the Biller of its revocation in such time and manner as to allow Invoice Cloud a reasonable opportunity to act on it, but not less than 10 business days notice; and (ii) all obligations of the Biller to Invoice Cloud that have arisen under this Agreement and all other agreements have been paid in full. The Biller must also notify Invoice Cloud, in writing, (by electronic or U.S. mail) when a change in Biller Bank Account account number(s) or bank has occurred at which time this authorization shall apply to such new/changed Biller Bank Account. This notification must be received no less than 10 business days in advance of any change. A fee will be charged for any returned or rejected ACH debits.

B. By signing below, the Biller named: (1) has read, agreed to, ratifies the Biller Agreement, Biller T+Cs (referenced in the Biller Agreement), the Statement of Work (referenced in the Biller Agreement), and other Order Forms previously executed by the Biller, and (2) certifies to Invoice Cloud that he/she is authorized to sign this Order Form; (3) certifies that all information and documents submitted in connection with this Order Form are true and complete; (4) authorizes Invoice Cloud or its agent to verify any of the information given, including credit references, and to obtain credit reports; (5) agrees to pay the Monthly Access Fee through the last day of the month following the effective date of termination as provided in the Billing Agreement; (6) agrees that Biller and each transaction submitted will continue to be bound by the Order Form and the Biller Agreement in its entirety and any new agreement forms executed herewith;
(7) agrees that Biller will submit transactions only in accordance with the information in this Biller Order Form and Biller Agreement and will immediately inform Invoice Cloud, by email ([email protected]) if any information in this Order Form changes; and (8) In the event of non-payment of any sums due, Invoice Cloud reserves the right to withdraw such sums from the Biller Bank Account at any time to ensure payment of the same.

C. Pay by Text: Standard data rates and text messaging rates may apply based on the payer's plan with their mobile phone carrier. Payer can opt out of text messaging at any time with Invoice Cloud. Partial payment or overpayment is not supported. Biller may not use the service for activities that violate any law, statute, ordinance or regulation.

D. This Biller Order Form will become effective only when signed by InvoiceCloud.

In WITNESS WHEREOF, the parties have executed this Agreement as of this day:

Accepted by Biller: Accepted by Invoice Cloud, Inc.:

X X

Corporate Officer/Authorized Official Corporate Officer

Michael Chandler

Kevin W. O'Brien

Printed Name Printed Name

City Manager

CEO

Title Title

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Bill er Order Form

BILLER ORDER FORM
INV

OICE TYPE PARAMETER SHEET
Invoice Type Parameters must be completed for each invoice type

Invoice Type Utility Pricing Model Submitter
Jack [email protected] Pays Network Fees No

CURRENT BILLING DETAILS
Please indicate how many bills are sent monthly by placing the bill count for each month below:

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
5761 5761 5761 5761 5761 5761 5761 5761 5761 5761 5761 5761

Avg CC
Tran
saction $ 253.00 Max Invoice $ 125,000.00 Bill Frequency Bi- Monthly
Avg. Bills Per
Month
5761

PRODUCTS AND SERVICES
Products and Services [EBPP] [IVR] [OBD] [Point of Sale]

TRANSACTIONAL PRICING (Paid by Biller)
Payment Source Description Payment Method Fee Rate % Fee Amount $ Additional Fee $ Online Bank Direct All Payment Methods $0.10
All Payment Sources ACH/EFT $0.35

TRANSACTIONAL PRICING EXCEPTIONS

SERVICE FEES (Paid by Payer)
Payment Source Description Payment Method Fee Amount Calculation Type Min. Fee ($) per Transaction
All Payment Sources Credit/Debit/PayPal 2.49 % Percent (%) $2.00

IVR Surcharge All Payment Methods $0.35 Fixed ($)

SERVICE FEE EXCEPTIONS

MAX PAYMENT CAP
Card and PayPal Max ($) 125,000 ACH Max ($) 125,000

BILLER BANK ACCOUNT (FOR DEPOSITS AND CHARGEBACKS)
Note: must include voided business check or bank letter for each unique acco unt Routing # Last 4 Acct # Last 4 Acct # for OBD

NOTES / SPECIAL HANDLING

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Bill er Order Form

157
Bill er Order Form

BILLER ORDER FORM
INV

OICE TYPE PARAMETER SHEET
Invoice Type Parameters must be completed for each invoice type

Invoice Type Utility Pricing Model Non-Submitter
Jack [email protected] Pays Network Fees Yes

CURRENT BILLING DETAILS
Please indicate how many bills are sent monthly by placing the bill count for each month below:

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
5761 5761 5761 5761 5761 5761 5761 5761 5761 5761 5761 5761

Avg CC
Tran
saction $ 253.00 Max Invoice $ 125,000.00 Bill Frequency Bi- Monthly
Avg. Bills Per
Month
5761

PRODUCTS AND SERVICES
Products and Services [EBPP] [IVR] [OBD] [Point of Sale]

TRANSACTIONAL PRICING (Paid by Biller)
Payment Source Description Payment Method Fee Rate % Fee Amount $ Additional Fee $ All Payment Sources ACH/EFT $0.35
Online Bank Direct All Payment Methods $0.10

TRANSACTIONAL PRICING EXCEPTIONS

SERVICE FEES (Paid by Payer)
Payment Source Description Payment Method Fee Amount Calculation Type Min. Fee ($) per Transaction

SERVICE FEE EXCEPTIONS

MAX PAYMENT CAP
Card and PayPal Max ($) 125,000 ACH Max ($) 125,000

BILLER BANK ACCOUNT (FOR DEPOSITS AND CHARGEBACKS)
Note: must include voided business check or bank letter for each unique acco unt Routing # Last 4 Acct # Last 4 Acct # for OBD

NOTES / SPECIAL HANDLING

158
Bill er Order Form

BILLER ORDER FORM
INV

OICE TYPE PARAMETER SHEET
Invoice Type Parameters must be completed for each invoice type

Invoice Type Miscellaneous Pricing Model Submitter
Jack [email protected] Pays Network Fees No

CURRENT BILLING DETAILS
Please indicate how many bills are sent monthly by placing the bill count for each month below:

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
412 412 412 412 412 412 412 412 412 412 412 412

Avg CC
Tran
saction $ 759.00 Max Invoice $ 125,000.00 Bill Frequency Monthly Avg. Bills Per Month
412

PRODUCTS AND SERVICES
Products and Services [Cloud Store] [IVR]

TRANSACTIONAL PRICING (Paid by Biller)
Payment Source Description Payment Method Fee Rate % Fee Amount $ Additional Fee $

TRANSACTIONAL PRICING EXCEPTIONS

SERVICE FEES (Paid by Payer)
Payment Source Description Payment Method Fee Amount Calculation Type Min. Fee ($) per Transaction
All Payment Sources Credit/Debit/PayPal 2.49 % Percent (%) $2.00

All Payment Sources ACH/EFT $0.35 Fixed ($)

SERVICE FEE EXCEPTIONS

MAX PAYMENT CAP
Card and PayPal Max ($) 125,000 ACH Max ($) 125,000

BILLER BANK ACCOUNT (FOR DEPOSITS AND CHARGEBACKS)
Note: must include voided business check or bank letter for each unique acco unt Routing # Last 4 Acct # Last 4 Acct # for OBD

NOTES / SPECIAL HANDLING

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RESOLUTION NO. 26 -___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARTINEZ

AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH INVOICE

CLOUD TO PROVIDE A PAYMENT PROCESSING PLATFORM
WHEREAS, the City of Martinez currently accepts payments through a combination of in-person and online platforms, including Tyler Munis Citizen Self Service for utility billing, Accela for development permits, and CivicRec for recreation program registrations; and WHEREAS, the City has not comprehensively reviewed or upgraded its payment processing system since 2017, and the current systems provide a fragmented experience for residents and limited payment options; and
WHEREAS, the City seeks to improve customer service, expand payment options, and streamline internal payment processing through the implementation of a modern electronic bill presentation and payment platform; and
WHEREAS, the Finance Department conducted a Request for Proposals (RFP) process to evaluate payment processing platforms capable of supporting online, mobile, and phone-based payment channels while integrating with the City’s Tyler Munis financial system; and WHEREAS, eight vendors responded to the RFP, and after evaluation staff identified the mos t qualified vendors and conducted additional review and vendor demonstrations; and WHEREAS, the Budget and Finance Subcommittee reviewed the vendor demonstrations and directed staff to conduct additional evaluation to support a final recommendation; and WHEREAS, following further evaluation, staff determined that Invoice Cloud provides the most comprehensive municipal -focused payment platform, offering multiple convenient payment channels, seamless integration with Tyler Munis, and customer -friendly feature s such as automated reminders, paperless billing, and a self-service customer portal; and WHEREAS, the proposed platform will provide residents with additional payment options including online, mobile, and phone-based payments, while improving operational efficiency and payment reconciliation for City staff.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Martinez hereby authorizes the City Manager to execute an agreement with Invoice Cloud to provide a payment processing platform for the City.
* * * * *

160
RESOLUTION NO. 26-___

I HEREBY CERTIFY that the foregoing is a true and correct copy of a resolution duly adopted by the City Council of the City of Martinez at a Regular Meeting of said Council held on March 18, 2026, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

__________________________________

KAT GALILEO, CITY CLERK

CITY OF MARTINEZ

161
Confidential & Proprietary © 2025 | 1
Pricing Proposal BOFA - City of Martinez, CA

1. City-paid model: Itemized processing fees absorbed by the City Utility payments:

ACH Payments: $.50 $.35
IVR Payments: $.50 $.35 (Can be absorbed by City or passed off to your customers, cannot be both) Paperless Billing: $.10 (Must be absorbed by City)

2. Customer-paid model: 3% convenience fee or similar structure Utility Payments:

Visa, MasterCard, Discover, PayPal, Venmo, GooglePay, ApplePay, AMEX 2.50% 2.49% with a $2 minimum fee IVR Payments: $.50 $.35 (Can be absorbed or passed off to your customers, cannot be both) Misc Payments:

Visa, MasterCard, Discover, PayPal, Venmo, GooglePay, ApplePay, and AMEX: 3% 2.49% with a $2 minimum fee.

ACH Payments: $.50 $.35 (Absorbed by City)

3. Breakdown by transaction type, tender, and volume
Please see above 1&2.

4. Visa, MasterCard, Discover, American Express
Utilities:

Customer-paid: 2.50% 2.49% with a $2 minimum fee.

Misc Payments:

Customer-paid: 3% 2.49% with a $2 minimum fee.

5. Debit cards
Utilities:

Customer-paid: 2.50% 2.49% with a $2 minimum fee.

Misc Payments:

Customer-paid: 3% 2.49% with a $2 minimum fee.

6. ACH/eCheck payments
Utilities & Misc Payments:

City-paid: $.50 $.35 (City absorbing)

7. Digital wallets (Apple Pay, Google Pay, etc.)
Utilities: (PayPal, Venmo, GooglePay, & ApplePay)
Customer-paid: 2.50% 2.49% with a $2 minimum fee. (Customers paying Digital wallets processing fees) Misc Payments:(PayPal, Venmo, GooglePay, & ApplePay)
Customer-paid: 3% 2.49% with a $2 minimum fee.

8. Any value-added bank account login-based services (e.g., “Pay with Bank Account” or “BankConnect”)
Online Bank Direct (OBD): $0.10 (Must be absorbed by City)

9. Pricing fixed for three years
Yes, InvoiceCloud agrees.

10. Equipment costs (card readers) to be clearly disclosed 6 Pax A80 Card Readers: ($30 per device per month): $180 per month.

Exhibit A – Invoice Cloud Fee Schedule
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Confidential & Proprietary © 2025 | 2
Updated Implementation Timeline 3/15/2026 Start Date:

Phase 1: Planning & Design
Duration: March 16, 2026 – April 3, 2026
• March 16: Project kickoff and welcome email from InvoiceCloud • March 17–20: Biller Order Form (BOF) finalized; merchant boarding begins • March 23: Kickoff call with Implementation Manager (IM) • March 24–April 3: City submits required items:
o Data files and sample bills
o Branding assets and configuration selections
o List of systems to integrate (e.g., Tyler Munis, Accela)

Phase 2: Execution
Duration: April 6, 2026 – June 26, 2026
• April 6–May 23: Development of integrations and staging environment • May 26–June 12: Internal QA testing by InvoiceCloud
• June 15–June 26: City User Acceptance Testing (UAT)

Phase 3: Implementation
Duration: June 29, 2026 – July 24, 2026
• June 29–July 10: Final production setup and pre-launch QA • July 13–July 17: Staff training sessions and readiness review • July 20–July 24: Final Go/No-Go review and mock go-live testing

Tentative Go-Live
Week of July 27, 2026

Post Go-Live Support
Duration: July 27, 2026 – August 31, 2026
• Ongoing support from Implementation Manager
• System monitoring, adjustment, and training as needed • Transition to dedicated Customer Success Manager by August 31

Notes:
• Timeline assumes standard 90-120 business day implementation.

Go-live date can shift based on integration complexity or City resource availability. 163

STAFF REPORT
City Council

City Council Staff Report Page 1 of 5
Date: March 18, 2026
To: Mayor and City Council
From: Michael Chandler, City Manager
Prepared By: Lauren Sugayan, Assistant City Manager
Title: Discontinuation of Pickleball at Hidden Valley Sport Courts

Recommendation
Adopt a resolution discontinuing pickleball play at Hidden Valley Sport Courts.

Background
Hidden Valley Sport Courts reopened in February 2025 following a renovation that converted former tennis courts into eight pickleball courts and one renovated tennis court. The project was funded largely through one-time grant funds from the American Rescue Plan Act (ARPA) – a COVID-19 federal relief program.

Shortly after the courts opened, the courts became a local and regional attraction and residents within the surrounding neighborhood began reporting concerns related to:

 Persistent pickleball paddle and ball noise;
 Increases in traffic and on-street parking congestion;  Noise from player gatherings and extended play periods;  General impacts to quality of life to a residential area.

Specifically, residents reported that the distinctive sound produced by pickleball paddles and balls, combined with player activity such as cheering and shouting , created frequent and prolonged noise disturbances. Due to the close proximity of the courts to surrounding homes, residents shared that these sounds traveled into t heir homes and backyards and negatively affected their quality of life.

Over the past year, staff implemented various measures that attempted to balance recreational use with neighborhood compatibility, including:
 Implementation of two trial periods with revised operating hours;  Reduction of total hours of play down to 20 hours per week (adopted by City Council in September 2025);
 Installation of court signage and neighborhood parking advisories;  Establishment of a volunteer pickleball ambassador program to reinforce rules and encourage the use of quieter equipment;
 Ongoing on-site monitoring by Community and Recreation Services staff; 164

City Council Staff Report Page 2 of 5
 Evaluation by Information Technology and Maintenance staff to install security cameras;  Review of multiple sound mitigation options by Engineering staff;  Engagement of an independent acoustical engineer.

The current hours of pickleball play at the Hidden Valley Sport Courts as adopted by the September 2025 resolution are:

1. Sunday, 9:00 a.m. to 1:00 p.m.

2. Tuesday, 4:00 p.m. to 8:00 p.m.

3. Wednesday, 8:00 a.m. to 8:00 p.m.

Residents have been encouraged to call the non -emergency Martinez P olice Dispatch line to report any behaviors or activities that would violate the court’s rules, for which ten calls were made between September and January. Most calls for service were related to individuals on the courts outside of the designated times. In most of these cases, Martinez Police showed up and could not locate any individuals.

City Council directed staff to conduct a neighborhood survey to hear more input from local residents, which was completed in Fall 2025.

The purpose of this staff report is to share the results of the resident survey, convey the findings of staff’s year-long evaluation effort and make a recommendation to discontinue pickleball play at the Hidden Valley Sport Courts.

Discussion
Over the past year, the City has made numerous efforts to address neighborhood concerns while preserving recreational access to the Hidden Valley Sport Courts. These efforts included operational changes, national research, community engagement, and consultation with technical experts to evaluate possible mitigation strategies.

Resident Survey
A link to an online survey was mailed to residential addresses within 500 feet of the pickleball courts. A total of 107 respondents took the survey, which is about half of the total addresses that were mailed. The full survey results are attached to this staff report.

Survey results show that neighborhood perspectives are divided, with nearly half of respondents experiencing negative impacts from pickleball activity in 2025 , compared to years prior . In addition, 41% of respondents noted that the court activity has negatively affected their sleep, relaxation, work -from-home or overall neighborhood experience. The main noise factors identified by respondents stems from the distinctive, high frequency noise that comes from the paddle hitting the ball, followed by player shouting and cheering. A total of 45% of respondents reported more foot and car traffic on their street as a result of the pickleball courts.

Overall, the survey demonstrated a mixed result between respondents that value the recreational amenity while some showing a preference for either full closure of the courts or continued reductions in hours of play.
165

City Council Staff Report Page 3 of 5
Problem Statement
Despite transitioning from near-constant use a year ago to its current schedule of reduced hours, the adjustments have not been enough to fully mitigate the impacts of sound and traffic disruptions in the neighborhood. The triad of policy tensions persist that:

1. Neighbors within the immediate vicinity still report negative impacts to their quality of life.

Some of these neighbors live within 50 to 100 feet of the courts.

2. Pickleball players, experiencing reduced access to the courts, have had to go to pickleball courts in neighboring jurisdictions.

3. Extensive City resources have been expended over the past year evaluating and implementing solutions, despite this issue not being identified as a priority park initiative on the City’s Strategic Plan.

Other Factors
National research shows that pickleball -related noise and compatibility issues are emerging in cities and communities across the country. Like Martinez, many jurisdictions are at different stages of addressing the challenge. In some cases, cities are facing costly litigation from nearby residents, while others have taken proactive steps to adopt sta ndards such as 300 –600 foot setbacks from residential or commercial uses. Current planning standards are moving away from locating pickleball courts adjacent to two-story homes. Even when sound blankets or fencing are installed, the distinctive noise gener ated by play can travel up and over barriers and into the second story of nearby residences. Some communities have also paused or reconsidered plans for new pickleball courts as they evaluate lessons learned from experiences occurring nationwide.
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City Council Staff Report Page 4 of 5
The pickl eball industry has promoted the use of “quiet -compliant” paddles as a potential mitigation measure, and these products are now widely available through major retailers.

However, many players view this change as comparable to altering a baseball or golf bal l, arguing that it fundamentally changes the feel and performance of the game. B ecause the use of quiet-compliant equipment is not preferred by pickleball players, this solution alone cannot resolve the noise phenomenon in most communities where conflicts have emerged.

Findings and Recommendation
Staff’s evaluation has focused on the broader issue of land-use compatibility between pickleball activity and the surrounding residential neighborhood. While the initial conversion of the courts was undertaken with good intentions and in response to community demand, the experience over the past year suggests that the level of activity generated by pickleball at this site is not compatible with its immediate residential setting.

There is no feasible way to mitig ate the noise from the courts through sound blankets or other barrier treatments. An independent acoustical engineer confirmed that the courts would need to be fully enclosed (both on the sides and overhead) in order to effectively contain the sound.

The c ourts are currently located approximately 50 to 100 feet from nearby homes, which is significantly closer than current planning standards that typically recommend setbacks of 300 to 600 feet from residential areas.

Additionally, part-time staff currently visit the site twice daily on the three permitted days of play to lock and unlock the courts. This approach requires ongoing staff resources and is not a sustainable long-term operational solution.

As a result, staff is recommending discontinuation of pickleball activity at this location. Staff also recommends keeping the tennis court adjacent to the pickleball courts open.

Next Steps
Looking ahead, the City remains committed to supporting recreational opportunities for pickleball players, but candidly, there is no easy solution locally that will fully replace the eight courts at Hidden Valley Sport Courts. Staff identified a total of 23 pickleball courts in Concord, four courts in Pleasant Hill, and ten in Walnut Creek. These offerings represent a combination of indoor and outdoor courts, and public and private courts. The two City-owned indoor sport facilities leased by Power Sports Academy and Universal Sports Academy have let staff know that they can support court rentals at a rate of $70 an hour.

The City’s ongoing Park System Master Plan process will provide an opportunity to evaluate potential locations for future pickleball courts that may be better suited for this use and include setbacks with sufficient distance from commercial and residential uses. 167

City Council Staff Report Page 5 of 5
In addition, staff will return to the City Council in the near future – including during the City’s Capital Improvement Program planning process – to evaluate potential options for the future use of the existing courts.

Upon adoption of the resolution, staff will immediately begin implementation, which will result in locking the current pickleball facility and removing its nets, while keeping the tennis court open.

Environmental Review
The discontinuation of pickleball p lay at the Hidden Valley Sport Courts is exempt from the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines Section 15061(b)(3), the common sense exemption, because it can be seen with certainty that the action will not result in a direct or reasonably foreseeable indirect physical change in the environment.

The proposed action is administrative in nature and does not authorize any construction, development, or physical modification to the site. Any future proposals for park improveme nts would be subject to separate environmental review.

Fiscal Impact
Extensive staff resources across multiple departments, along with costs related to ongoing operational changes, have been expended over the past year. Additional staff time and maintenance resources will be required to implement the proposed resolution. Future discussions regarding potential new uses for the sports courts, and any associated costs, will be incorporated into the City’s Capital Improvement Program planning process.

Attachments
 Resolution – Discontinuing Pickleball at the Hidden Valley Sport Courts  Attachment A – Resident Survey Results

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# OTHER (PLEASE SPECIFY) DATE
1 It wasn’t too noticeable but I was aware of the issues. 11/10/2025 7:39 PM 2 I don’t hear it in my house, but people play too early like when taking the kids to school. It is very noisy anywhere near the area.
11/10/2025 4:23 PM
3 Parking for residents and noise has become an issue. 11/10/2025 2:32 PM 174
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# OTHER (PLEASE SPECIFY) DATE
1 Increase in trash in the neighborhood 1/7/2026 5:17 PM 2 We never heard noise from the courts before the recent construction changes 11/24/2025 10:38 AM 3 I miss having the courts open more. The courts are a bonus to home value and I would like them open more
11/23/2025 11:35 AM
4 I live fairly far from the courts, but I can clearly hear the noise. I would not want that activity any closer to my home.
11/19/2025 8:40 PM
5 It has been so noisy with the pickleball there now! 11/17/2025 5:35 PM 6 Pickleball courts should never be near residential homes, it is an inappropriate place for a Pickleball court. Yelling, screaming, partying, on top of the ungodly amount of noise that the Pickleball Inherently produces
11/17/2025 10:07 AM
7 This residential area is not an appropriate place to put an extensive recreation set up 11/15/2025 9:20 PM 8 None 11/15/2025 12:23 PM
9 The City is knowingly allowing the Pickleball community to create noise levels that are above what the municipal states. This has affected my sleep, happiness, quality of life and ability to relax in my own home. There are many Pickleball lawsuits all over the country. Martinez needs to do the right thing and close the courts permanently at Hidden Valley. 11/13/2025 8:15 PM
10 The Pickleball courts have had a horrible impact on my neighbors and myself. I hate the sound of the plastic ball striking the paddle. The Pickleball courts were placed way too close to homes. I cannot enjoy my backyard, side yard or anywhere inside during playing hours. This is a negative impact on my right to enjoy my property. Close the courts permanently. 11/13/2025 4:29 PM
11 Parking on my street. I know there was signs posted to park on Center Ave, however many do not pay attention to that.
11/12/2025 5:04 PM
12 Parking is an issue on Center Avenue for parents picking up and dropping off kids for Hidden Valley School. Pickleball players speed up and down Center Ave. They have been discourteous. We live in this neighborhood and they should be respectful. 11/12/2025 9:12 AM
13 Yelling obscenities. I walk to the park down that path and often there are large groups of people taking the entire path. I have dogs and kids and it's difficult to walk thru a crowd 11/11/2025 9:04 PM
14 Rude and noisy players! 11/11/2025 6:37 PM
15 Intrusion into our peace and privacy. Players looking into our residence, at all hours. 11/11/2025 4:48 PM 16 It’s hard to leave my neighborhood with all the card parked on center: I cannot see when turning left. Once I got almost hit by a car when leaving. 11/11/2025 4:09 PM
17 I like the pickle ball court, and I want to see it continue to be used frequently 11/10/2025 7:09 PM 18 The community of players who come through are awful! I have lived here for over 8 years and have CERTAINLY noticed a difference and not in a positive way! 11/10/2025 5:47 PM
19 There is a sadness now that the time restrictions are in place. The courts can’t even be used for tai-chi, elderly walking on smooth surface and the tennis courts that were originally ally there were never locked. The locks are truely unnecessary 11/10/2025 5:02 PM
20 Increased traffic and parking. Are all of these people Martinez folks or we attract Pickleballers? If so, our neighborhood doesn’t really benefit positively. 11/10/2025 4:42 PM
21 I am hearing impaired and I don't hear the activity in my home. Outside I do but it doesn't bother me during daytime hours.
11/10/2025 4:41 PM
22 More garbage in my yard 11/10/2025 2:35 PM
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Pickleball Neighborhood Survey
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# OTHER (PLEASE SPECIFY) DATE
1 Played twice. Was too busy with people who aren’t from our neighborhood to return regularly 1/7/2026 5:17 PM 2 NA 12/3/2025 8:50 AM
3 Don't use it 11/29/2025 6:15 PM
4 checked it out when they first opened 11/22/2025 4:35 PM 5 Haven’t used 11/21/2025 4:04 PM
6 Tennis!!! 11/20/2025 9:01 AM
7 N/A 11/19/2025 8:40 PM
8 have not used for pickleball 11/17/2025 5:35 PM
9 Take my toddler to the tennis court to play 11/17/2025 9:05 AM 10 Don't use 11/16/2025 12:07 PM
11 Have not been able to use 11/16/2025 12:06 PM
12 Too many people 11/15/2025 12:23 PM
13 Tennis 11/13/2025 6:32 PM
14 I don’t use them 11/12/2025 9:51 PM
15 Never used 11/11/2025 9:04 PM
16 We cannot really use it: it’s hoarded by the pickleball fanatics. 11/11/2025 4:09 PM 17 None 11/11/2025 3:04 PM
18 Watch people play when I am taking a walk. 11/10/2025 7:49 PM 19 My husband plays pickleball and went a couple times but the community of players is so loud and aggressive, and overall just rude. Which is such a shame bc the community we live in as a resident here is so wonderful. My Husband has opted to drive to Brentwood! For pickleball, Vs literally 10 seconds from our home… He would rather drive 45 min away. 11/10/2025 5:47 PM
20 Watching people enjoy a healthy activity. 11/10/2025 5:31 PM 21 Don’t use 11/10/2025 4:58 PM
22 None 11/10/2025 4:45 PM
23 Our son visited and played pickleball with his Dad. Once…the next time there were no courts available and lots in line already.
11/10/2025 4:42 PM
24 Use tennis court occasionally 11/10/2025 4:41 PM
25 Na 11/10/2025 4:26 PM
26 Haven’t used 11/10/2025 2:03 PM
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# OTHER (PLEASE SPECIFY) DATE
1 We have played Tennis there in the past but its too crowded now with pickleball people - we would not go there for tennis anymore
11/24/2025 10:38 AM
2 I use the courts 11/23/2025 11:35 AM
3 Handicap 11/21/2025 4:04 PM
4 I feel that it is incredibly inconsiderate and rude to play a sport like pickle ball near peoples homes, I would never feel comfortable playing a sport like that 20 feet from somebody’s bedroom window let alone scream, screaming, and yelling. It is incredibly inconsiderate. 11/17/2025 10:07 AM
5 I do use them 11/16/2025 8:41 PM
6 Allotted time for people using the courts are not specified or not enforced 11/16/2025 12:06 PM 7 None 11/15/2025 12:23 PM
8 Why would I participate in something that makes my neighbors and I miserable? We do not like these courts here. The placement of these courts was more than negligent. The noise is horrible even for ten minutes a day. This has made the neighborhood unlivable. Close the courts now.
11/13/2025 8:15 PM
9 I hate the sound of the plastic ball striking the paddle. This ruined our neighborhood and we need to close the courts immediately. Homeowners have no where to go and we are trapped inside our homes during playing hours. Close the courts due to the noise level which most likely exceeds what is allowed in the municipal code. Close the courts permanently. 11/13/2025 4:29 PM
10 May play sometime in future. 11/12/2025 5:04 PM
11 Theres a park literally across the street 11/11/2025 9:04 PM 12 I don’t have that much time for it. 11/11/2025 6:22 PM 13 Arthritis in my knee 11/10/2025 7:49 PM
14 Na 11/10/2025 7:09 PM
15 73 years old 11/10/2025 6:06 PM
16 Not applicable 11/10/2025 4:42 PM
17 Available times are too restrictive 11/10/2025 4:11 PM 191
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Pickleball Neighborhood Survey
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# OTHER (PLEASE SPECIFY) DATE
1 Have heard and witnessed drones flying. People are taking videos of them playing under the power lines! Have seen and HEARD it
1/7/2026 5:19 PM
2 Return to tennis a d build new courts IN THE PARK 11/20/2025 9:05 AM 3 The only bothersome part of these courts are really parking & foot traffic! 11/16/2025 12:15 PM 4 Too much noise for a residential neighborhood. The City cannot allow their own noise municipal code to be broken just for the Pickleball community. The City needs to value homeowners and close the courts permanently because we deserve a decent and safe place to live. Close the courts permanently.
11/13/2025 8:18 PM
5 I hate these Pickleball courts. The noise level from the paddles striking the stupid plastic balls is way too loud. This noise most likely exceeds what is allowed in the municipal code for noise. These pickleball courts need to be closed immediately and permanently. The City is violating homeowners right to enjoyment of property by having them open for any length of time. I cannot enjoy my backyard, side yard or the interior of my house due to the noise. Close these courts immediately and permanently!
11/13/2025 4:36 PM
6 Barking or fighting dogs, motorcycles parked on the walking path and their engines raving or starting right behind my home.
11/13/2025 2:44 PM
7 Loud cussing 11/11/2025 9:06 PM
8 Dogs barking (players having brought pets to the court/landing area). 11/11/2025 4:49 PM 197
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RESOLUTION NO. 26 -___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARTINEZ DISCONTINUING

PICKLEBALL PLAY AT THE HIDDEN VALLEY SPORT COURTS
WHEREAS, the Hidden Valley Sport Courts reopened in February 2025 following renovations that converted former tennis courts into eight pickleball courts and one renovated tennis court; and
WHEREAS, the renovation project was funded largely through one -time grant f unds from the American Rescue Plan Act (ARPA), which are COVID-era relief funds; and WHEREAS, shortly after opening, the courts became a local and regional recreational destination; and
WHEREAS, residents in the surrounding neighborhood reported concerns related to pickleball paddle and ball noise, increased traffic and on-street parking, noise from player gatherings, and other impacts affecting neighborhood quality of life; and WHEREAS, over the past year City staff implemented numerous measures to balance recreational access with neighborhood compatibility, including revised operating hours, a reduction of total hours of play, signage and parking advisories, a volunteer ambassador program, on -site monitoring, engineering review of potential sound mitigation options, and consultation with an independent acoustical engineer; and WHEREAS, the City conducted a neighborhood survey of residents within 500 feet of the courts to gather input regarding the impacts of pickleball activity with about half of residents responding to the survey; and
WHEREAS, the results of the survey demonstrated divided perspectives among residents, with a significant portion of respondents indicating that pickleball activity had negatively affected sleep, relaxation, work-from-home conditions, or overall neighborhood experience; and WHEREAS, staff’s evaluation determined that the distinctive sound generated by pickleball paddles and balls can travel significant distances, particularly where courts are located in close proximity to residential homes; and
WHEREAS, the courts at Hidden Valley Sport Courts are located approximately 50 to 100 feet from nearby residences, which is substantially closer than current planning standards that commonly recommend setbacks of 300 to 600 feet from residential uses; and WHEREAS, the independent acoustical evaluation determined that meaningful noise mitigation would require full enclosure of the courts, including both side and overhead structures; and 222
RESOLUTION NO. 26-___

WHEREAS, staff has determined that such mitigation measures are not feasible for this site and that the level of pickleball activity generated at this location is not compatible with the surrounding residential neighborhood; and
WHEREAS, the City re mains committed to supporting recreational opportunities, including pickleball, and will evaluate potential future locations through the City’s Park System Master Plan process; and
WHEREAS, the City Council desires to discontinue pickleball play at the Hid den Valley Sport Courts while continuing to allow tennis play at the remaining tennis court.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Martinez as follows:

1. Pickleball play at the Hidden Valley Sport Courts is hereby discontinued.

2. The existing tennis court at the Hidden Valley Sport Courts shall remain open for public use.

3. City staff is directed to implement this resolution, including securing the pickleball courts, removing pickleball nets and related equipment, and making any nece ssary operational adjustments.

4. The City Council directs staff to evaluate potential alternative recreational uses for the existing sport courts and to consider opportunities for future pickleball facilities through the City’s Park System Master Plan and Ca pital Improvement Program planning processes.

5. This action is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3), the common sense exemption, because it can be seen with certainty that the action will not result in a direct or reasonably foreseeable indirect physical change in the environment.
* * * * *
I HEREBY CERTIFY that the foregoing is a true and correct copy of a resolution duly adopted by the City Council of the City of Martinez at Regular Meeting of said Council held on the 18th day of March, 2026, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
__________________________________

KAT GALILEO, CITY CLERK

CITY OF MARTINEZ
223

STAFF REPORT
City Council

City Council Staff Report Page 1 of 3
Date: March 18, 2026
To: Mayor and City Council
From: Michael Chandler, City Manager
Prepared By: Lauren Sugayan, Assistant City Manager
Matthew Summers, Assistant City Attorney
Title: Umbrella Business License for Community Events

Recommendation
Conduct a public hearing and adopt a resolution

1. Authorizing community event organizers to obtain an umbrella business license for community events.

2. Amending the City’s User Fee Schedule to add a permit processing fee for the proposed umbrella business license and determining the project is statutorily exempt pursuant to Public Resources Code Section 21080(b)(8) and CEQA Guidelines Section 15273(a).

Background
Martinez Municipal Code section 5.16.010 requires all businesses to obtain a business license and pay a business tax for the privilege of conducting business within the City of Martinez , subject to specified exemptions.

The City has a long -standing tradition of supporting non -profits, community groups, and residents who organize events to be enjoyed by the community. Under Martinez Municipal Code Sections 5.20.020 –5.20.040, charitable and non -profit entities are generally exempt from business license requirements. However, the Code does not clarify whether this exemption applies to vendors contracted by event organizers.

Enforcing individual single -day or multi -day business licenses for small vendors can be burdensome for community events such as farmers markets, vendor fairs, and gatherings with multiple small vendors and food trucks, many of whom do not regularly operate in Martinez. For these vendors, the cost of obtaining a temporary license can become a barrier to participatio n.

Additionally, processing individual licenses for each single - or multi -day vendor requires significant administrative effort.

The City’s desire is to remove obstacles for community events by creating an alternative for event organizers to bring in small vendors without needing to obtain a single - or multi -day business license.
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City Council Staff Report Page 2 of 3
Strategic Plan Alignment
This agenda item aligns with the following goal and strategy:
 Goal E. Community Health, Safety and Well-being
o Strategy 1 - Maintain a safe, clean, and active downtown to ensure an enjoyable and welcoming experience for all.

Discussion
Martinez Municipal Code section 5.12.020 authorizes the City Council to, by resolution, adopt administrative rules and regulations necessary to carry out its business license process. This provision gives the City broad authority to adopt regulations relat ed to business licenses which are in the best interests of the City.

Several provisions of the Martinez Municipal Code state charitable, non-profit, and benevolent entities must be given flexibility as it pertains to the City’s business license requirement s.

Martinez Municipal Code section 5.20.040 provides an exemption to the business license requirement for non-profit entities which conduct business wholly for the benefit of benevolent or charitable purposes. Furthermore, Martinez Municipal Code sections 5.20.020 and 5.20.030 provide additional exemptions for entities which seek to conduct business for benevolent and charitable purposes. In addition to these exemptions, the attached proposed resolution would give community event sponsors the option to obtain an umbrella business license for Community Events.

The attached proposed resolution would allow an event organizer of a Community Event, upon obtaining a valid umbrella business license, to contract with any vendors and concessions.

Vendors and concessions contracted or employed by the event sponsor will not be required to obtain a separate business license and will be authorized to conduct business for-profit or non- profit in the City within the limited scope of the licensed Community Event.

The sponsor of a Community Event must obtain an umbrella business license to exempt contracted for-profit and non-profit vendors, promoters, and service providers pursuant to the attached proposed resolution.

Staff conducted research of cities that have an umbrella license model with fees scaled based on the number of vendors participating. In nearby Danville, the following exists:
 Business License required for Amusement and Iterant Businesses (businesses that are not operated or carried on throughout the year such as circuses, carnivals, and other exhibitions involving temporary place of sale): $100 per day  Annual Marketplaces: $150 per organizer, promoter or sponsor and event organizer covers vendors.
 Street Fairs: $150 per event and per organizer, promoter or sponsor. 225

City Council Staff Report Page 3 of 3
Based on research, staff is recommending a permit processing fee of $100 per event organizer, which will cover all vendors participating in a single- or multi-day event.

Staff has engaged both the Martinez Chamber of Commerce and Downtown Martinez and Company, along with other event organizers, who support this proposed model.

For implementation purposes, the Community and Recreation Services Division, which administers the special event permit pr ocess, will incorporate the newly established umbrella business license processing fee into the existing permit process.

Fiscal Impact
Staff anticipates minimal fiscal impact given that the City is not currently collecting business license fees from small vendors participating in community events. There are circumstances that exist today where the City’s third-party business license vendor is seeking out business license compliance from small vendors who have participated in recent community events ; therefore, this resolution would bring immediate clarity to the City’s third-party vendor and small vendors.

Attachments
 Resolution – Umbrella Business License for Community Events

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RESOLUTION NO. 26-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARTINEZ

AUTHORIZING COMMUNITY EVENT ORGANIZERS TO OBTAIN AN UMBRELLA BUSINESS LICENSE FOR COMMUNITY EVENTS, AMENDING THE CITY’S USER FEE

SCHEDULE TO ADD A PERMIT PROCESSING FEE FOR THE PROPOSED UMBRELLA

BUSINESS LICENSE AND DETERMINING THE PROJECT IS STATUTORILY EXEMPT PURSUANT TO PUBLIC RESROUCES CODE SECTION 21080(b)(8) AND CEQA GUIDELINES SECTION 15273(a)
WHEREAS, the City of Martinez’s business license program ensures all businesses comply with applicable State, County, and City regulations; and
WHEREAS, Martinez Municipal Code section 5.16.010 requires all businesses to obtain a business license and pay a business tax for the privilege of conducting business within the City of Martinez, subject to certain exemptions; and
WHEREAS, Martinez Municipal Code section 5.12.020 authorizes the City Council to adopt, by resolution, administrative rules and regulations necessary to carry out its business license scheme; and
WHEREAS, Martinez Municipal Code section 5.20.040 provides an exemption to the business license requirement for non-profit businesses which conduct business wholly for the benefit of benevolent or charitable purposes; and
WHEREAS, Martinez Municipal Code sections 5.20.020 and 5.20.030 provide additional exemptions for business es which seek to conduct business for benevolent and charitable purposes, thereby including community events; and
WHEREAS, the aforementioned sections of the Martinez Municipal Code indicate the City Council may extend significant flexibility to non -profit businesses and community event organizers with respect to the City’s business license requirements; and WHEREAS, the number of community events sponsored by non-profits, community groups, and other organizers, often featuring multiple vendors at a single event , has grown, and the current requirement for each vendor to obtain an individual business license discourag es participation; and
WHEREAS, consistent with the City’s strategic plan goal of creating a safe, and welcoming community, the City desires to remove obstacles for community events by creating an alternative for event organizers to bring in small vendors without needing to obtain a single - or multi-day business license; and
WHEREAS, under the authority of the Martinez Municipal Code, the City of Martinez wishes to provide community event sponsors with an option to obtain an umbrella business license which would relieve the burden of obtaining separate business licenses for each individual vendor , promoter, or service provider contracted or employed by the non-profit business for participation in a Community Event.
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RESOLUTION NO.26-__

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Martinez hereby resolves as follows:

1. Recitals. The Recitals above are true and correct and incorporated herein by this reference.

2. Umbrella Business License for Community Events. The sponsor of a Community Event may obtain an umbrella business license pursuant to this Resolution for the Community Event . Upon obtaining a valid umbrella business license, a sponsor of a Community Event shall be authorized to contract with event vendors, promoters, and service providers for a single community event. Vendors , promoters, and service providers contracted, employed, or engaged by the sponsor of the Community Event for this purpose shall not be required to obtain a separate business license and shall be authorized to conduct business, for-profit or non-profit, in the City within the limited scope of the licensed Community Event.

3. Umbrella Business License Required. The sponsor of a Community Event shall obtain an umbrella business license to exempt contracted for -profit and non -profit vendors, promoters, and service providers for the Community Event . The umbrella business license shall be obtained through the special event process administered by the Community and Recreation Services Division.

4. Umbrella Business License Fee. The permit processing fee for the umbrella business license is $100.

5. CEQA. The adoption of this resolution is exempt from review under the California Environmental Quality Act per CEQA Guidelines, Title 14, California Code of Regulations section 15378, subds. (b)(2,5).
* * * * *
I HEREBY CERTIFY that the foregoing is a true and correct copy of a resolution duly adopted by the City Council of the City of Martinez at a Regular Meeting of said Council held on the 18th day of March, 2026, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
_________________________________

KAT GALILEO, CITY CLERK

CITY OF MARTINEZ

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STAFF REPORT
City Council

City Council Staff Report Page 1 of 4
Date: March 18, 2026
To: Mayor and City Council
From: Michael Chandler, City Manager
Prepared By: Brandon Northart, AICP, Associate Planner
Michael P. Cass, Assistant Community and Economic Development Director Title: Introduction of Ordinance Amending Condominium Conversion Regulations

Recommendation
Conduct a public hearing , waive the reading, and introduce an Ordinance approving amendments to the Martinez Municipal Code by repealing Chapter 21.56 (Regulations for the Conversion of Rental Units to Condominiums) in its entirety and replacing it with Chapter 21.56 (Condominium Conversion) to update regulations to be consistent with State law and Metropolitan Transportation Commission’s Transit Oriented Communities Policy.

Background
Condominium Conversion and Existing Regulations
Martinez Municipal Code (“MMC”) Chapter 21.56 (Regulations for the Conversion of Rental Units to Condominiums) was originally adopted in 1979 and currently regulates condominium conversions in Martinez. A “condominium conversion” means the conversion of the ownership of the units in a residential housing project that are occupied as rental units from single ownership to an ownership in which the res idential units may be sold individually. The purpose of the regulations are to establish requirements and procedures to be followed for the review and approval or disapproval of the conversion of existing multifamily rental housing to residential condominiums and to mitigate the effect of such conversions on tenants of rental housing as much as possible by providing a procedure for notice of conversion, assistance to relocate as necessary, and establish rental unit replacement requirements. 2023-2031 Housing Element
The City’s certified 2023 -2031 Housing Element includes Policy H -3.4: Preservation of Rent - Restricted Units, which requires the City to regulate the conversion of existing apartment complexes to condominium ownership.

Transit-Oriented Communities Policy
In September 2022, the Metropolitan Transportation Commission (“MTC”) established the Transit-Oriented Communities (“TOC”) Policy. The TOC Policy seeks to support the region’s transit investments by ensuring communities around transit stations and along transit corridors 229

City Council Staff Report Page 2 of 4
are places that not only support transit ridership, but are places where Bay Area residents of all abilities, income levels, and racial and ethnic backgrounds can live, work, and access services.

The TOC Policy is rooted in Plan Ba y Area (“PBA”) 2050, the region’s Long Range Transportation Plan/Sustainable Communities Strategy, and addresses all four elements of the Plan—transportation, housing, the economy, and the environment. Compliance with the TOC Policy is voluntary for jurisdictions that want to advance the goals of PBA 2050 or to be eligible and competitive for some MTC discretionary funding, including the One Bay Area Grant (“OBAG”) funding cycles. To be eligible for funding, compliance is due by July 1, 2027.

The TOC Policy requirements consist of the following four elements:

1. Minimum residential and commercial office densities for new development.

2. Affordable housing production, preservation and protection, and stabilizing businesses to prevent displacement.

3. Parking management.

4. Transit station access and circulation.

To comply, local jurisdictions are required to select two policies for each of the “3Ps”-affordable housing production, preservation, and protection. On November 20, 2024, the City Council directed staff to pu rsue compliance with the TOC Policy, including Preservation Policy 4:

Condominium Conversion Restrictions.

Planning Commission Review
On February 24 , 2026 , the Planning Commission considered the draft Ordinance and unanimously adopted Resolution No. 2 6-05, recommending that the City Council adopt the proposed Ordinance.

Discussion
To comply with State law and the various policies provided above, and remain competitive in future OBAG funding cycles, the Planning Division is proposing t o repeal MMC Chapter 21.56 (Regulations for the Conversion of Rental Units to Condominiums) and replace the existing regulations under a new Chapter title, Chapter 21.56 (Condominium Conversion).

Generally, staff are recommending repealing and replacing th e existing Chapter for several reasons. The existing regulations already include provisions related to tenant protections; however, these regulations fall short by modern -day standards, particularly in respect to clear requirements, procedural detail, and enforceable mechanisms. In addition, several of the existing provisions focus on disclosure requirements for future purchasers of converted units.

Staff determined these requirements are largely redundant, as disclosure obligations are already comprehensively addressed through State law and modern practices applicable to the sale of residential property, and enforcement by staff would be an administrative burden. Lastly, the existing regulations require converted units to conform with new design and constru ction 230

City Council Staff Report Page 3 of 4
standards on existing residential properties, which would be a significant hinderance to existing property owners.

The proposed amendments to the Chapter, provided in Attachment B, include the following:
 Findings: Adds “findings” to assist future de cisionmakers with reasons for the Zoning Administrator or the Planning Commission to either approve or deny condominium conversion requests.
 Tenant Notification Requirements : Requires property owners to issue several notifications to existing and prospecti ve tenants at every stage of a proposed condominium conversion, including a Notice of Intent to Convert, Notice of Application to Convert, Notice of Conversion Approval, Notice of Right to Purchase, and Notice to Vacate.
 Tenant Relocation Assistance Plan : Requires property owners to create a “Tenant Relocation Assistance Plan” that outlines how they will address relocation fees, assist with temporary relocation, right-to-return stipulations, and rent adjustments.  Inclusionary Housing Requirements: Reinforces the City’s existing Inclusionary Housing Requirements (MMC Chapter 22.82), which requires conversion projects where 11 or more units are proposed for conversion to provide a certain percentage of the units as deed-restricted affordable housing.
 Replacement Requirements: Adds the requirement that property owners either provide replacement rental units at a one-to-one ratio or with an in-lieu fee for conversion projects where 11 or more rental units are proposed to be converted. Projects converting 10 or fewer units would not be subject to this requirement.
 Approval Authority: Clarifies that conversion projects that have 10 or fewer units proposed for conversion can be approved by the Zoning Administrator, and by the Planning Commission when 11 more units are proposed for conversion.  Design and Construction Standards : Requires converted units to comply with applicable building and safety standards in the Residential Code, as determined by the Chief Building Official, based on an inspection, rather than the current standards that may not be feasible such as changes to storage area or private outdoor space.

The proposed amendments to MMC Chapter 21.56 were reviewed by the MTC for conformance with the TOC Policy.

The City Council is now being asked to conduct a public hearing and introduce the Ordinance approving the MMC amendments.

Compliance with City of Martinez Four-Year Strategic Plan The proposed Zoning Text Amendments are consistent with Goal C: Economic Development and Housing in the City’s Four-Year Strategic Plan, since it would continue to ensure the City remains compliant with State housing laws , TOC Policy, and the City’s 2023 -2031 Housing Element.
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City Council Staff Report Page 4 of 4
Public Noticing and Outreach
The City published a “Notice of Public Hearing” in the Contra Costa News Register, was posted at City Hall, was posted on the City’s website, and was mailed via first class or electronic mail to individuals who had previously filed written request for such notice a minimum of 10 days in advance of the public hearing.

Environmental Review
The proposed Ordinance is exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Sections 15305 and 15061(b)(3), which exempts adoption of an ordinance entailing minor alterations in land use limitations and under the common-sense exemption as there is no possibility that the ordinance in question will have a significant effect on the environment.

Fiscal Impact
Adoption of the updated condominium conversion regulations could result in the creation of a new revenue source for the City’s Afforda ble Housing Fund with implementation of an in -lieu fee. Further, the new regulations would enable the City to remain eligible for OBAG funding for transportation projects.

Attachments
 Draft Ordinance – Condominium Conversion Regulations
 Attachment A – Tracked Changes Version of Proposed Code Amendments

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ATTACHMENT A – TRACKED CHANGES VERSION OF PROPOSED CODE AMENDMENTS

233

CHAPTER 21.56 - REGULATIONS FOR THE CONVERSION OF RENTAL UNITS TO

CONDOMINIUMS

21.56.001. Purpose.

A. To establish requirements and procedures to be followed for the review and approval or disapproval of the conversion of existing multiple-family rental housing to residential condominiums;
B. To mitigate the effect of such conversions on tenants of rental housing as much as possible by providing a procedure for adequate notice of conversion as well as adequate time and assistance to relocate as necessary;
C. To establish criteria for condominium conversion projects by requiring conformance to the City's building code and other development standards set forth in this Chapter; D. To ensure that the deve loper of the project provides adequate private outdoor living space, storage and parking space, usable open space and other amenities; E. To provide for planning, unforeseen change, and compliance with the City's General Plan and Housing Element;
F. To ensure th at the developer is attentive to the performance characteristics of the structure and mitigates such problems as vibration and noise transmission which may be apparent to the buyer without living in the unit;
G. To provide a procedure whereby potential buyers of converted units will be properly informed as to the physical condition of the structure for purchase; H. To ensure that the conversion maintains its integrity, not only to preserve the long-term financial commitment of the unit owner but to optimize the u tilitarian and aesthetic qualities that make the project a viable home for the owner long into the future.

21.56.002. General provisions.

A. Conformity with the General Plan - The conversion of rental units to condominium shall conform with the principles and standards of the General Plan.

B. This design or improvement of any existing structure or structures proposed to be converted to condominiums shall conform to and be in accordance with the most currently adopted requirements of all building and fire codes, zoning provisions and all other applicable local ordinances and regulations, and shall in addition conform to and be in accordance with the following standards in effect at the time of filing of the tentative map:

1. Housing Code;

2. Unsafe Structures Code;

3. Building Security Ordinance;

4. Fire Code.

21.56.003. Buyer protection provisions.
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Prior to incurring any obligation to purchase any converted unit, all potential buyers shall be provided with an informational document containing the following: (informational document shall be in a form approved by the Planning and Building Director.) A. A listing of the services and facilities to be furnished to individual owners and a statement of all fees and other conditions applicable to the use of such services and facilities.

B. A statement of the estimated annual operating and maintenance costs for all common facilities and services for the next three years, as prepared or reviewed by a professional management firm familiar with operating and maintaining costs of similar property in the area.

C. A statement indicating the availability of CC&R's for the project for review by buyer.

D. A statement granting each buyer a one year warranty on all appliances in each unit and granting to the homeowners association a one year warranty on all str uctures in the project and all electrical, heating, air conditioning, plumbing, ventilation equipment, roofing and elevators.

E. A statement of proposed improvements and repairs to be made by the subdivider.

F. A copy of the Building Inspectors pre-conversion inspection.

G. A copy of the pest control report.

H. A copy of the acoustical engineer's analysis determining the soundproof standards of all common walls and ceiling separations.

I. A statement of any other information that the Planning and Building Director reasonably determines should be furnished to a prospective purchaser to enable him to make an informed decision regarding the purchase of a unit in that project.

21.56.004. Tenant protection and assistance provisions.

For the protection of tenants in buildings pr oposed to be converted to a condominium, all such proposed conversions shall comply with the following provisions:

A. Notification.

1. Each tenant shall receive a "Notice of Intention to Convert" at least 180 days prior to filing an application and tentative subdivision map with the City. The notice shall indicate to each tenant that:
a. The owners of the building are considering converting each rental unit to a condominium;
b. If the application to convert each unit to a condominium is approved by the City each unit may be subject to future sale; and
c. Per City ordinance, all tenants must be notified of any intention to convert at least 180 days before the application is filed. Additionally, the notice shall include a step-by-step time frame outlining the entire conversion process from the date of initial notification of intent to convert, to the date of required vacation or purchase of the respective unit. Proof or evidence of delivery of such notice to each tenant, 235

including a copy of that notice shall be filed with the City Planning Department within thirty (30) days after tenant notification.

2. If, within the initial 180-day notification period, a change in occupancy occurs which results in the presence of a tenant who has not received the 180 day notice, the applicant shall file with the Planning Department an agreement signed by that tenant waiving the 180 -day notice requirement. The waiver shall contain a step -by-step time frame outlining the entire conversion process.

3. Each tenant shall be notified in writing of the public hearing in which the tentative map will be considered at least ten (10) days prior to that hearing. The developer shall be responsible for making said notice and shall file a copy of the notice with the Planning Department.

B. Right of first refusal. Provided he is not then in default under his lease or rental arrangement, each tenant occupying a unit to be converted shall be given the right, for a period of sixty (60) days after the issuance of the Final Public Report or commencement of sales (whichever is later) to purchase his unit on terms equal to or more favorable than the terms on which such unit to be offered to the public. The developer shall file evidence with the Planning Department that each tenant has been notified of this right and that said notice was delivered to the tenant at the time described by Sec. 66427.1 of the Subdivision Map Act. If any tenant chooses to waive his right to first refusal of the unit he occupies, a waiver, signed by that tenant shall be filed with the Planning Department.

C. Moving expenses. The applicant, shall bear relocation expenses for each non - purchasing tenant a rate of 1 ½ times the monthly rental rate. This clause will be invoked only for cases when non-purchasing tenants are requested by the subdivider to vacate respective units that have been sold.

D. Copies of all correspondence between the subdivider and the tenants shall be filed with the Planning Department.

21.56.005. Application requirements.

The conversion of multiple family rental housing into condominiu ms shall be subject to all applicable rules and regulations prescribed by the State Subdivision Map Act. The applicant shall provide the City with 35 copies of the Tentative Map accompanied by a sufficient number of site development plans to be determined by the Planning and Building Director. In addition to exhibits, as required by Sec. 21.42.060 of the Martinez Municipal Code, the plans shall also show in detail:

A. Location of each common area;
B. Location of each private open space;
C. Locations and dimensions of parking garages and carports including individual parking stalls on the site;
D. Location and dimension of exterior storage space for each individual unit; E. Landscaping Plan;
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F. Tenant Information

1. Names of current tenants and the length of time they have rented the unit;

2. Rental history of each unit for the preceding three years;

3. Current rental rate for each unit;

4. Any proposed program of relocation assistance by the applicant including the applicant's proposed payment of moving expenses incurred by the present tenants;

5. The applicant shall have provided proof to the City that each tenant is advised of the intention of the applicant to subdivide the existing apartment complex into condominium units at least 120 days in advance of the date of the filing of the tentative subdivision map. If, within 180 days a change in occupancy occurs resulting in the presence of a tenant who has not received the 180 -day notice, the applicant shall file with the Planning Department an agreement signed by that tenant that he waives the 180-day notice requirement.

G. Physical elements report.

1. The applicant shall submit a report by an acoustical engineer which determines the STC rating for all common walls and ceiling separations in each unit. Where walls or ceiling separations cannot meet the minimum soundproof standards as required by the most recently adopted version of the Uniform Building Code, the applicant shall make necessary improvements prior to the filing of the final map or enter into an agreement in recordable form providing tha t no sale of any unit shall take place until such necessary improvements are made.

2. The applicant shall submit to a detailed preconversion inspection to be performed by the City Building Inspector. The inspection report shall identify all areas where minimum code compliance is not achieved per most recently adopted version of the UCB.

3. The applicant shall also submit to a preconversion analysis of all structures by a licensed structural pest control operation relating to the presence of wood-destroying pests or other organisms. A copy of this analysis shall be submitted to the City Planning Department prior to consideration of the tentative subdivision map.

H. A draft copy of a declaration of CC&R's which will apply and which shall include an agreement for common area maintenance, including facilities and landscaping together with an estimate of the initial assessment fees anticipated for such maintenance; a description of a provision for maintenance of vehicular access areas within the project; and an indication of appropriate responsibilities for maintenance of all utility lines and services for each unit.

I. Other information which, in the opinion of the Planning and Building Director, will assist in determining whether the proposed project is consistent with this Chapter.

J. The conversion of rental units to owner-occupied units is detrimental to the provision of local housing opportunities and, as long as a low vacancy rate exists, there should be 237

a conversion moratorium. No conversions shall be approved when the vac ancy rate within the City, as estimated by the State of California Department of Finance, is equal to or less than 5 percent.

K. Exception: New apartment rental development shall be exempt from the provisions of Section 21.56.005 -J, provided that no public mo nies are used in the financing or subsidization of the new rental development.

21.56.006. Design and construction standards.

A. Each unit shall meet the sound transmission control requirements of the most recently adopted version of the UBC (Uniform Building Code). A written statement of compliance signed by a licensed acoustical engineer shall be submitted for a permanent record.

B. Each unit shall be provided with a draft stop at each wall with no openings where determined feasible by the Building Inspector.

C. Each unit shall be provided with smoke detectors conforming to UBC standards.

D. Each converted unit shall be separately metered for gas and electricity. A plan for equitable sharing of water metering shall be developed prior to filing the final map and shall be incorporated into the CC&R's.

E. Utility easements shall be provided for each dwelling with an access agreement for entry to repair and maintain same. Individual shutoff valves and disconnects shall be provided for each unit.

F. Each unit shall provide 1 ½ off-street parking spaces (one covered). There is no visitor or RV parking requirement.

G. At least 150 cubic feet per unit of enclosed weatherproof and lockable storage space shall be provided in addition to that ordinarily contained within each unit. It may be either within or exterior to the unit.

H. A minimum of 100 sq. ft. of appurtenant usable private area shall be provided contiguous with each unit.

I. 100 sq. ft. of open space shall be provided for each unit. Such open space shall be over and above the area pr ovided by setback requirements and parking facilities and additional to required private open space.

J. Energy conservation requirements for conversions:

1. All doors and windows shall be weatherstripped or suitably insulated.

2. All stove fans shall be insulated to be made low infiltration.

3. In cases where appliances are replaced, appliances that are of low energy design shall be opted for.

4. Installation of R-19 insulation in all attics where not presently installed.

21.56.007. Landscape maintenance agreement.

The owner of the project shall enter into a landscape maintenance agreement before recordation of the final subdivision map.
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21.56.008. Park dedication fees.

Each unit shall be subject to full park dedication fees at the rate in effect at the time the final map is filed less park dedication fees previously paid to the City.

21.56.009. Requirements for design review approval.

Design Review shall be required of all projects proposed for conversion to condominiums. The Design Review approval shall be based on overall site development which involves all proposed or existing building elevations, proposed grading, areas of both common and private open space, areas of private storage, parking and landscaping and how each relates to the development standards of the ordinance and this site.

21.56.100. Conditions.

The City may impose any conditions it deems necessary in order to ensure that the proposal will conform with the requirements of this Chapter.

21.56.105. Exemption.

The Downtown Martinez Core Area (described as the twelve city blocks lying north of Ward Street, east of Berrellesa Street, south of Escobar Street and west of Court Street), shall be exempt from the following sections related to regulations for the Conversion of Rental Units to Condominiums:

A. Section 21.56.004; and
B. Section 21.56.006 F, G, H, and I. (Ord. 902 C.S., 1979)

21.56.130. Appeal to City Council—Hearing.

The procedure involved in the appeal of a City Planning Commission action is set forth in Sec.

21.42.100 of the Martinez Municipal Code.

CHAPTER 21.56 - CONDOMINIUM CONVERSION

21.56.010. Purpose.

A. To establish requirements and procedures to be followed for the review and approval or disapproval of the conversion of existing multifamily rental housing to residential condominiums;
B. To mitigate the effect of such conversions on tenants of rental housing as much as possible by providing a procedure for notice of conversion, assistance to relocate as necessary, and establish rental unit replacement requirements; C. To establish criteria for condominium conversion projects by requiring conformance to the applicable building codes and other standards set forth in this Chapter; D. To provide for planning, unforeseen change, and compliance with the City's General Plan and Housing Element; and
E. To provide a procedu re whereby potential buyers of converted units will be properly informed as to the physical condition of the structure for purchase. 239

21.56.020. Condominium Conversion Defined.

A “condominium conversion” means the conversion of the ownership of the units in a residential housing project that are or were previously occupied as rental units from a single ownership to an ownership in which the residential units may be sold individually. Such condominium conversions may include, but are not limited to, the conve rsion of existing rental residential housing projects to a community apartment project, a condominium project, and a stock cooperative, as defined in California Civil Code Section 1351.

21.56.030. Findings.

The review authority shall not approve a condomin ium conversion project unless the proposed project conforms with the following findings:

A. The conversion of rental units to condominiums is consistent with the General Plan and the Municipal Code.

B. The conversion of rental units to condominiums will not be detrimental to the health, safety, or general welfare of the community.

C. Vacancies in the project have not been increased for the purpose of preparing the project for conversion.

D. The conversion will not adversely impact the community's ability to provide housing for all economic segments of the community.

21.56.040. Building Code Standards.

The building and each unit proposed for conversion within the building shall comply with the Martinez Municipal Code Chapter 15.05 (Residential Code). The Chief Building Official or designee shall, if deemed necessary, inspect the project. Upon completion of the inspection, if any, the Chief Building Official or designee shall identify all items evidenced by the application or the inspection to be in noncompliance with applicable building and safety standards. All such items shall be corrected to the satisfaction of the Chief Building Official or designee, prior to recordation of the Final Map.

21.56.050. Existing and Prospective Tenant Notification.

A. Generally. All notices referred to in this Section shall be provided either by the property owner by personal delivery and mailing the notice via certified mail with return receipt requested. Evidence of compliance with this Section shall be submitted with the application for conversion or immediately thereafter, as applicable. Notices must be written in non-technical language comprehensible to all tenants of the building. Notices provided by the property owner shall be in both English and in the language used in the original lease or rental agreement, and any other language necessary to effectively communicate with the tenant population to clearly inform them of their rights as required by this Chapter. Copies of notices and forms shall be made available if a tenant indicates the items have been misplaced or lost or are otherwise needed. The property owner shall determine whether a member of the household of each unit can speak English and seek appropriate assistance in communicating the importance of the contents of the notice to any household whose members cannot speak English. 240

B. Notice of Intent to Convert to Current Tenants. Consistent with Government Code Section 66427.1(a), or any successor statute, at least 60 calendar days prior to the time of the filing of an application for the conversion of rental units, the property owner shall send to each tenant of the rental units to be converted a notice in the form outlined in Government Code Section 66452.9 or any successor statute.

C. Notice of Intent to Convert to Prospective Tenants. Commencing at a date not less than 60 calendar days prior to the submittal of an application for the conversion of rental units, the property owner shall give notice of such application to each person applying after such date for rental of a unit of the subject property immediately prior to the acceptance of any rent or deposit from the prospective tenant.

D. Notice of Application to Convert Has Been Submitted. Within ten calendar days after the submittal of a formal application for the conversion of rental units to a condominium development, the property owner shall send to each tenant, and provide to each person who becomes a tenant at any time subsequent to such date, a written notice informing the tenants of all rights provided under the Martinez Municipal Code and state law, including:

1. The property owner of the rental unit in which the tenant resides has submitted an application to the City to convert the units to a condominium development, the date such application was made, and if approved, that tenants will eventually be required to move unless they purchase the unit or qualify for and accept an offer of a lease as provided in this Chapter.

2. A detailed description of the property owner ’s plans for relocation of tenants, relocation assistance, co mpliance with the sales and lease program for qualified acutely low-, extremely low -, very low -, low -, and moderate -income tenants, and limitations on rent increases.

3. That the property owner submitted an application for a “Public Report ” to the California Department of Real Estate and that such report will be made available upon request, in accordance with the provisions of California Government Code Section 66427.1(a) or any successor statute.

4. That each tenant will be given at least ten calendar days' prior written notice by the property owner of the date, time, and place of any public hearing held on the application.

5. Each tenant will be notified in writing of the approval of the conversion, if it is approved, within ten calendar days of such action by the property owner.

6. Each tenant will receive ten calendar days' written notification from the property owner that a final map for the conversion has been recorded and the implications of that filing.

7. Tenants have a right to terminate their leases with no penalties. 241

E. Notice of Conversion Approval. If a conversion application is approved, then the property owner must provide a notice of conversion approval to each tenant within ten calendar days of the approval. The notice of approval shall contain:

1. Tenant's right to purchase and the terms thereof;

2. Tenant's right of notification to vacate with approximate date the unit is to be vacated by;

3. Statement of terms and conditions of tenancy; and

4. Provisions for relocation and moving expenses, as described in Section 21.56.060.

F. Notice of Right to Purchase. If a conversion application is approved, then the property owner must provide a notice of right to purchase to each tenant. The notice of right to purchase shall be provided to each tenant at least ten days prio r to the submission of an application to the Department of Real Estate for a Public Report and shall contain:

1. The property owner shall provide notice to each tenant in the project of the fact that the application for a Public Report will be submitted and t hat upon the issuance of the Public Report the tenant will be granted an exclusive right to contract for the purchase of the unit occupied by the tenant.

2. Each tenant shall receive a written notice of an exclusive right to contract for the purchase of their respective unit upon the same terms and conditions that such unit will be initially offered to the general public or on terms more favorable to the tenant.

3. This right shall run for a period of not less than 90 calendar days from the date of issuance of the subdivision Public Report issued by the California Department of Real Estate, unless the tenant gives prior written notice of his or her intention not to exercise the right.

4. At least ten days prior to the submission of an application to the Department of Real Estate for a Public Report, the property owner shall provide notice to each tenant in the project of the fact that the application for a Public Report will be submitted and that upon the issuance of the Public Report the tenant will be granted an exclusive right to contract for the purchase of the unit occupied by the tenant.

5. The notice shall further indicate the project will be subject to conditions, covenants, and restrictions establishing a homeowners' association to manage the project, that may restrict how the property is used, and that impose certain financial obligations on the owners of units within the project, such as the payment of monthly homeowners' association dues.

6. In addition, within ten days of the issuance of the Public Report, the property owner shall by mail notify each tenant in writing that the Public Report has been issued and shall in writing grant the tenant the right to purchas e the unit as provided in this Section.
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7. If the notice is not mailed within ten days of the issuance of the Public Report, then the tenant's right to purchase granted , pursuant to this Section , shall be extended for a period equal to 90 days from mailing of the notification.

G. Notice to Vacate. Each tenant shall receive written notice to vacate the unit. In accordance with the provisions of California Government Code Section 66427.1(c) or any successor statute, such notice shall be provided at least 180 cale ndar days from the first notice to vacate the unit and at least sixty 60 days prior to the filing of a tentative map. Additional notice shall be given at least 60 calendar days after the filing of the final map, provided that approval of a condominium conversion shall not impair the length of term or any other rights of a tenant under a validly existing lease or tenant agreement

21.56.060. Tenant Relocation Assistance Plan.

For the protection of tenants in rental units proposed to be converted to a condomin ium, all property owners shall be required to prepare a “Tenant Relocation Assistance Plan” that outlines how the property owner will address and account for the following items, as applicable:

A. Relocation Fee. Any property owner who serves a notice of intent to convert to tenants pursuant to this Chapter shall pay a relocation fee to each tenant in accordance with the provisions of this Section. Such relocation fee shall be due and payable to each tenant who is not in default under their tenancy and does no t exercise their right to purchase their unit, unless the existing property owner notifies each tenant in writing of the withdrawal of the notice of intent to convert prior to such time as the tenant has:

Given the property owner notice of their last date of occupancy, or vacated their unit if such notice of the last date of occupancy is not given by the tenant. The property owner must file a copy of such withdrawal notice with the City within one week after serving such notice on the tenant.

1. Amount of Fee . The relocation fee due to each non -purchasing tenant shall be calculated as follows:
a. Residing on property for less than two years: equivalent to three months’ worth of fair market rent.
b. Residing on property for two years or longer: equivalent to four months’ worth of fair market rent.
c. A tenant who, at the time of the notice of intent to convert is filed with the City, is disabled, 60 years or older, terminally ill, or who is a single head of household with minor children, shall be entitled to receive an additional payment of $2,500.00. If more than one additional payment category applies, then the property owner shall provide payment of $2,500 for each category.

2. Time of Payment. The relocation fee shall be paid to any tenant who vacates the rental unit at the time they vacate.

B. Temporary Relocation Assistance. If temporary relocation of any tenant is necessary for renovation or rehabilitation of a unit between the date of submission of the conversion application and the date established for permanent relocation of the tenant, then the property owner shall describe how they will maintain habitability for the tenant 243

and any adjacent units during such time. In the event such actions requires a tenant to be temporarily relocated, then the property owner shall a lso include details about how they will assist with temporary relocation, which must include:

1. Rent. Offering an available unit at the same rent (if the property owner owns other properties within Central Contra Costa County as provided by the Contra Costa Transportation Authority)

2. Moving Expenses. Paying for moving expenses to both the temporary housing and back to the subject dwelling unit. Payment for moving expenses can either be paid directly by the property owner to a licensed and insured moving comp any or by reimbursing the tenant for the actual and documented cost of moving by a licensed and insured moving company.

3. Temporary Housing. Providing to pay for the cost of temporary housing in excess of their current monthly rent for the full duration of the relocation.

C. Right-to-Return and Rent Adjustments. The property owner must agree to continue renting to the existing tenant after repairs are complete with reasonable limits on rent increases for that tenant, as provided by the California Tenant Protection Act.

21.56.070. Application Requirements.

The conversion of rental housing into condominiums shall be subject to all applicable rules and regulations prescribed by the State Subdivision Map Act. In addition to exhibits as required by Martinez Municipal Code Section 21.42.060, the application shall also include details related to the following:

A. Location of each common area.

B. Location of each private open space.

C. Locations and dimensions of parking garages, carports, and individual parking spaces on the site.

D. Location and dimension of exterior storage space for each individual unit.

E. Landscaping Plan.

F. Tenant Relocation Assistance Plan, as referenced in Section 21.56.060.

G. Tenant Information:

1. Names of current tenants, addresses, and the length of time they h ave rented the unit;

2. Rental history of each unit for the preceding three years; and

3. Current rental rate for each unit.

H. A draft copy of a declaration of the conditions, covenants, and restrictions which will apply and which shall include an agreement for co mmon area maintenance, including facilities and landscaping together with an estimate of the initial assessment fees anticipated for such maintenance; a description of a provision for maintenance of 244

vehicular access areas within the project; and an indicat ion of appropriate responsibilities for maintenance of all utility lines and services for each unit.

I. Other information which, in the opinion of the Community and Economic Development Director and City Engineer, or designees, will assist in determining whet her the proposed project is consistent with this Chapter.

21.56.080. Parkland Dedication fees.

Each unit shall be subject to full parkland dedication fees at the rate in effect at the time the final map is filed less parkland dedication fees previously paid to the City for that unit.

21.56.090. Inclusionary Housing Requirements
A. Applicability. Condominium conversions which result in the conversion of 11 or more rental units shall be required to comply with Chapter 22.82 (Inclusionary Housing).

B. Credit for Pr ior Inclusionary Zoning Compliance. If the project was required to comply with the Inclusionary Zoning regulations at the time the project was originally constructed, then the project shall receive a credit towards its inclusionary housing obligation equal to the affordable housing requirement applicable at that time.

C. Existing Affordable Units. Any existing affordable units within the project created pursuant to the City’s Inclusionary Housing regulations shall remain affordable units for the remaining extent of their deed-restriction term.

D. In-Lieu Fee Credit Limitation. If Inclusionary Zoning in-lieu fees were paid rather than creating affordable units, the property owner shall be responsible for payment any difference between the previously paid in -lieu fees and the in-lieu fees required under the current Inclusionary Housing regulations.

21.56.100. Replacement Requirement.

In the event that 11 or more rental units are proposed for conversion to condominiums, then Applicants shall be required to provide one or a mix of the following:

A. Replacement Units.

1. Ratio. The Applicant shall provide replacement rental dwelling units on a one-to-one basis for each rental dwelling unit proposed to be converted starting with the 11 th unit.

2. Location. The replacement units shall be on the same site as the converted project or at an alternative site within the City, subject to the approval of the Community and Economic Development Director, or designee.

3. Timing. The replacement units shall be available for occupancy no later than the date of final conversion of the respective displaced tenant.

4. Comparable Units. The replacement units shall be comparable to the converted units with respect to:
a. An equal number of bedrooms and bathrooms;
b. Size and quality of construction;
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c. Accessibility features; and
d. Rent less than or equal to the original rental unit.

5. Inclusionary Requirements. Replacement rental units required pursuant to this section shall not be credited toward compliance with the City’s Inclusionary Housing regulations, unless expressly permitted by those regulations.

B. In-Lieu Fee. Applicants may request to pay an in -lieu fee of all or some of the replacement units otherwise required. The in -lieu fee shall be calcula ted on a per-unit basis and be in an amount sufficient to mitigate the loss of rental housing that results from condominium conversions, in accordance with applicable law and as determined by the respective review authority.

1. Nexus Study. Applicants shall be responsible for preparation of a nexus study demonstrating the relationship between the fee and the cost of providing the replacement housing and reflect the full cost of replacing a comparable rental dwelling unit, including land acquisition, construct ion, and soft costs. The nexus study shall be subject to review by City staff or peer review by a qualified consultant at the expense of the Applicant.

2. Timing. The in-lieu fee shall be paid prior to recordation of the final map.

3. Use of Fees. The in-lieu fees collected shall be deposited in the Affordable Housing Fund.

C. Alternative Means of Compliance. Alternative means of compliance for providing replacement units may be approved upon showing, supported by substantial evidence, that strict application of the se replacement requirements would preclude any reasonable economic use of the property, subject to City Council approval.

D. Exceptions. Condominium conversion projects shall not be required to comply with these replacement requirements if:

1. At least 90 percent of condominium units are purchased by current tenants.

2. Conversions to 100 percent housing units with long-term affordability restrictions for households earning 120 percent of Area Median Income (“AMI”) or less.

21.56.110. Procedures.

A. Projects Converting Less 10 or Fewer Rental Units. Projects which propose to convert less than 10 rental units to condominiums shall be subject to approval by the Zoning Administrator.

B. Projects Converting 11 or More Rental Units. Projects which propose to convert 11 or more rental units to condominiums shall be subject to approval by the Planning Commission.

21.56.120. Appeal to City Council—Hearing.

The procedure involved in the appeal of a Planning Commission action is set forth in Section

21.42.100.
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AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MARTINEZ APPROVING

AMENDMENTS TO THE MARTINEZ MUNICIPAL CODE BY APPROVING AMENDMENTS

TO THE MARTINEZ MUNICIPAL CODE BY REPEALING AND REPLACING CHAPTER

21.56 (REGULATIONS FOR THE CONVERSION OF RENTAL UNITS TO CONDOMINIUMS) IN ITS ENTIRETY AND REPLACING IT WITH CHAPTER 21.56 (CONDOMINUM

CONVERSION) TO UPDATE REGULATIONS TO BE CONSISTENT WITH STATE LAW AND METROPOLITAN TRANSPORTATION COMMISSION’S TRANSIT ORIENTED

COMMUNITIES POLICY
WHEREAS, the City of Martinez ’s (“the City”) certified 2023-2031 Housing Element includes Policy H -3.4: Preservation of Rent -Restricted Units, which requires the City to regulate the conversion of existing apartment complexes to condominium ownership; and

WHEREAS, the Metropolitan Transportation Commission (“MTC”) adopted the Transit-Oriented Communities (“TOC”) Policy which seeks to support the region’s transit investments by ensuring communities around transit stations and along transit corridors are places that not only support transit ridership, but are places where Bay Area residents of all abilities, income levels, and racial and ethnic backgrounds can live, work, and access services . The TOC Policy requires local jurisdictions to fulfill the Affordable Housing and Commercial Stabilization requirements by selecting from the menu of options that best meet local needs including condominium conversion restrictions; and

WHEREAS, compliance with the TOC Policy is voluntary for jurisdictions that want to advance the goals of Plan Bay Area (“ PBA”) 2050 or to be eligible and/or competitive for MTC discretionary funding, including the One Bay Area Grant (“OBAG”) funding cycles; and

WHEREAS, the City strives to comply with the TOC Policy to become eligible for future OBAG funding cycles; and

WHEREAS, Martinez Municipal Code (“MMC”) Chapter 21.56 (Regulations for the Conversion of Rental Units to Condominiums) currently regulations condominium conversions and was originally adopted in 1979; and

WHEREAS, the City seeks to repeal MMC Chapter 21.56 (Regulations for the Conversion of Rental Units to Condominiums) and replace it with Chapter 21.56 (Condominium Conversion); and

WHEREAS, Chapter 21.56 (Condominium Conversion) would be amended to comply with State law, MTC’s TOC Policy, and the City’s certified 2023-2031 Housing Element; and

WHEREAS, the Planning Commission held a public hearing on the proposed Municipal Code 247

ORDINANCE NO. ____

Amendments on February 24, 2026, during which all interested persons were heard, and the Planning Commission found that the Municipal Code Amendments are consistent with the General Plan 2035 and all applicable Specific Plans and therefore, adopted Planning Commission Resolution No. 2 6-05 recommending City Council adoption of the proposed Ordinance; and

WHEREAS, the City Council held a public hearing on the proposed Municipal Code Amendments on March 18, 2026, at which time all interested parties had the opportunity to be heard; and

WHEREAS, proper notice of said hearing was given in all respects as required by law; and

WHEREAS, the City Council did hear and consider all said reports, recommendations, and testimony herein above set forth and used its independent judgement to evaluate the project.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MARTINEZ DOES ORDAIN AS FOLLOWS:

SECTION I: DETERMINATIONS
Pursuant to MMC Section 22.46.020, the City Council hereby finds the Municipal Code Amendments are consistent with the General Plan 2035 and all applicable Specific Plans in that they are necessary to comply with State law and are consistent with applicable land use regulations and development policies. For instance, Goal LU-G-2 from the General Plan commits the City to “create development that enhances the existing character and preserves the natural resources, residential neighborhoods, commercial areas, and smalltown historic character of Downtown Martinez to the maximum extent feasible.” Further, the certified 2023-2031 Housing Element includes Policy H-3.4: Preservation of Rent -Restricted Units, which requires the City to regulate the conversion of existing apartment complexes to condominium ownership.

SECTION II: ENVIRONMENTAL REVIEW
The California Environmental Quality Act (“CEQA”), together with State Guidelines require that certain projects be reviewed for environmental impacts and that environmental documents be prepared. Pursuant to the CEQA, the City Council hereby finds the proposed Ordinance is exempt from the requirem ents of the CEQA pursuant to CEQA Guidelines Sections 15305 and 15061(b)(3), which exempts adoption of an ordinance entailing minor alterations in land use limitations and under the common-sense exemption as there is no possibility that the ordinance in question will have a significant effect on the environment SECTION III: IMPLEMENTATION
Chapter 21.56 (Regulations for the Conversion of Rental Units to Condominiums ) of Title 2 1 (Subdivisions) of the MMC is hereby repealed in its entirety. 248

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SECTION IV: IMPLEMENTATION
Chapter 21.56 (Regulations for the Conversion of Rental Units to Condominiums ) of Title 2 1 (Subdivisions) of the MMC is hereby replaced by Chapter 21.56 (Condominium Conversion), as follows:

21.56.010. Purpose.

A. To establish requirements and procedures to be followed for the review and approval or disapproval of the conversion of existing multifamily rental housing to residential condominiums;
B. To mitigate the effect of such conversions on tenants of rental housing as much as possible by providing a procedure for notice of conversion, assistance to relocate as necessary, and establish rental unit replacement requirements; C. To establish criteria for condominium conversion projects by requiring conformance to the applicable building codes and other standards set forth in this Chapter; D. To provide for planning, unforeseen change, and compliance with the City's General Plan and Housing Element; and
E. To provide a procedure whereby potential buyers of converted units will be properly informed as to the physical condition of the structure for purchase.

21.56.020. Condominium Conversion Defined.

A “condominium conversion” means the conversion of the ownership of the units in a residential housing project that are or were previou sly occupied as rental units from a single ownership to an ownership in which the residential units may be sold individually. Such condominium conversions may include, but are not limited to, the conversion of existing rental residential housing projects t o a community apartment project, a condominium project, and a stock cooperative, as defined in California Civil Code Section 1351.

21.56.030. Findings.

The review authority shall not approve a condominium conversion project unless the proposed project conforms with the following findings:

A. The conversion of rental units to condominiums is consistent with the General Plan and the Municipal Code.

B. The conversion of rental units to condominiums will not be detrimental to the health, safety, or general welfare of the community.

C. Vacancies in the project have not been increased for the purpose of preparing the project for conversion.

D. The conversion will not adversely impact the community's ability to provide housing for all economic segments of the community.

21.56.040. Building Code Standards.

The building and each unit proposed for conversion within the building shall comply with the Martinez Municipal Code Chapter 15.05 (Residential Code). The Chief Building Official or 249

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designee shall, if deemed necessary, ins pect the project. Upon completion of the inspection, if any, the Chief Building Official or designee shall identify all items evidenced by the application or the inspection to be in noncompliance with applicable building and safety standards. All such items shall be corrected to the satisfaction of the Chief Building Official or designee, prior to recordation of the Final Map.

21.56.050. Existing and Prospective Tenant Notification.

A. Generally. All notices referred to in this Section shall be provided either by the property owner by personal delivery and mailing the notice via certified mail with return receipt requested. Evidence of compliance with this Section shall be submitted with the application for conversion or immediately thereafter, as applicable . Notices must be written in non-technical language comprehensible to all tenants of the building. Notices provided by the property owner shall be in both English and in the language used in the original lease or rental agreement, and any other language neces sary to effectively communicate with the tenant population to clearly inform them of their rights as required by this Chapter. Copies of notices and forms shall be made available if a tenant indicates the items have been misplaced or lost or are otherwise needed. The property owner shall determine whether a member of the household of each unit can speak English and seek appropriate assistance in communicating the importance of the contents of the notice to any household whose members cannot speak English.

B. Notice of Intent to Convert to Current Tenants. Consistent with Government Code Section 66427.1(a), or any successor statute, at least 60 calendar days prior to the time of the filing of an application for the conversion of rental units, the property owner shall send to each tenant of the rental units to be converted a notice in the form outlined in Government Code Section 66452.9 or any successor statute.

C. Notice of Intent to Convert to Prospective Tenants. Commencing at a date not less than 60 calendar days prior to the submittal of an application for the conversion of rental units, the property owner shall give notice of such application to each person applying after such date for rental of a unit of the su bject property immediately prior to the acceptance of any rent or deposit from the prospective tenant.

D. Notice of Application to Convert Has Been Submitted . Within ten calendar days after the submittal of a formal application for the conversion of rental un its to a condominium development, the property owner shall send to each tenant, and provide to each person who becomes a tenant at any time subsequent to such date, a written notice informing the tenants of all rights provided under the Martinez Municipal Code and state law, including:

1. The property owner of the rental unit in which the tenant resides has submitted an application to the City to convert the units to a condominium development, the date such application was made, and if approved, that tenants will eventually be required to move unless they purchase the unit or qualify for and accept an offer of a lease as provided in this Chapter.

2. A detailed description of the property owner ’s plans for relocation of tenants, relocation assistance, compliance w ith the sales and lease program for qualified 250

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acutely low-, extremely low -, very low -, low -, and moderate -income tenants, and limitations on rent increases.

3. That the property owner submitted an application for a “Public Report ” to the California Department of Real Estate and that such report will be made available upon request, in accordance with the provisions of California Government Code Section 66427.1(a) or any successor statute.

4. That each tenant will be given at least ten calendar days' prior writte n notice by the property owner of the date, time, and place of any public hearing held on the application.

5. Each tenant will be notified in writing of the approval of the conversion, if it is approved, within ten calendar days of such action by the property owner.

6. Each tenant will receive ten calendar days' written notification from the property owner that a final map for the conversion has been recorded and the implications of that filing.

7. Tenants have a right to terminate their leases with no penalties.

E. Notice of Conversion Approv al. If a conversion application is approved, then the property owner must provide a notice of conversion approval to each tenant within ten calendar days of the approval. The notice of approval shall contain:

1. Tenant's right to purchase and the terms thereof;

2. Tenant's right of notification to vacate with approximate date the unit is to be vacated by;

3. Statement of terms and conditions of tenancy; and

4. Provisions for relocation and moving expenses, as described in Section 21.56.060.

F. Notice of Right to Purchase. If a conversion application is approved, then the property owner must provide a notice of right to purchase to each tenant. The notice of right to purchase shall be provided to each tenant at least ten days prior to the s ubmission of an application to the Department of Real Estate for a Public Report and shall contain:

1. The property owner shall provide notice to each tenant in the project of the fact that the application for a Public Report will be submitted and that upon t he issuance of the Public Report the tenant will be granted an exclusive right to contract for the purchase of the unit occupied by the tenant.

2. Each tenant shall receive a written notice of an exclusive right to contract for the purchase of their respective unit upon the same terms and conditions that such unit will be initially offered to the general public or on terms more favorable to the tenant.

3. This right shall run for a period of not less than 90 calendar days from the date of issuance of the subdiv ision Public Report issued by the California Department of Real Estate, unless the tenant gives prior written notice of his or her intention not to exercise the right.
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4. At least ten days prior to the submission of an application to the Department of Real Estate for a Public Report, the property owner shall provide notice to each tenant in the project of the fact that the application for a Public Report will be submitted and that upon the issuance of the Public Report the tenant will be granted an exclusive right to contract for the purchase of the unit occupied by the tenant.

5. The notice shall further indicate the project will be subject to conditions, covenants, and restrictions establishing a homeowners' association to manage the project, that may restrict how the property is used, and that impose certain financial obligations on the owners of units within the project, such as the payment of monthly homeowners' association dues.

6. In addition, within ten days of the issuance of the Public Report, the property owner shall by mail notify each tenant in writing that the Public Report has been issued and shall in writing grant the tenant the right to purchase the unit as provided in this Section.

7. If the notice is not mailed within ten days of the issuance of the Public Report, then the tenant's right to purchase granted , pursuant to this Section , shall be extended for a period equal to 90 days from mailing of the notification.

G. Notice to Vacate. Each tenant shall receive written notice to vacate the unit. In accordance with the provisions of California Government Code Section 66427.1(c) or any successor statute, such notice shall be provided at least 180 calendar days from the first notice to vacate the unit and at least sixty 60 days prior to the filing of a tentative map. Additional notice shall be given at least 60 calendar days after the filing of the final map, provided that approval of a condominium conversion shall not impair the length of term or any other rights of a tenant under a validly existing lease or tenant agreement

21.56.060. Tenant Relocation Assistance Plan.

For the protection of tenants in rental units proposed to be converted to a condominium, all property owners shall be required to prepare a “Tenant Relocation Assistance Plan” that outlines how the property owner will address and account for the following items, as applicable:

A. Relocation Fee. Any property owner who serves a notice of intent to convert to tenants pursuant to this Chapter shall pay a relocation fee to each tenant in accordance with the provisions of this Section. Such relocation fee shall be due and payable to each tenant who is not in default under their tenancy and does not exercise their right to purchase their unit, unless the existing property owner notifies each tenant in writing of the withdrawal of the notice of intent to convert prior to such time as the tenant has:

Given the property owner notice of their last date of occupancy, or v acated their unit if such notice of the last date of occupancy is not given by the tenant. The property owner must file a copy of such withdrawal notice with the City within one week after serving such notice on the tenant.

1. Amount of Fee. The relocation fee due to each non -purchasing tenant shall be calculated as follows:
a. Residing on property for less than two years: equivalent to three months’ worth 252

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of fair market rent.
b. Residing on property for two years or longer: equivalent to four months’ worth of fair market rent.
c. A tenant who, at the time of the notice of intent to convert is filed with the City, is disabled, 60 years or older, terminally ill, or who is a single head of household with minor children, shall be entitled to receive an additional payment of $2,500.00. If more than one additional payment category applies, then the property owner shall provide payment of $2,500 for each category.

2. Time of Payment. The relocation fee shall be paid to any tenant who vacates the rental unit at the time they vacate.

B. Temporary Relocation Assistance. If temporary relocation of any tenant is necessary for renovation or rehabilitation of a unit between the date of submission of the conversion application and the date established for permanent relocation of the tenant, then the property owner shall describe how they will maintain habitability for the tenant and any adjacent units during such time. In the event such actions requires a tenant to be temporarily relocated, then the property owner shall also include details about how they will assist with temporary relocation, which must include:

1. Rent. Offering an available unit at the same rent (if the property owner owns other properties within Central Contra Costa County as provided by the Contra Costa Transportation Authority)

2. Moving Expenses. Paying for moving expenses to both the temporary housing and back to the subject dwelling unit . Payment for moving expenses can either be paid directly by the property owner to a licensed and insured moving company or by reimbursing the tenant for the actual and documented cost of moving by a licensed and insured moving company.

3. Temporary Housing. Providing to pay for the cost of temporary housing in excess of their current monthly rent for the full duration of the relocation.

C. Right-to-Return and Rent Adjustments. The property owner must agree to continue renting to the existing tenant after repairs are complete with reasonable limits on rent increases for that tenant, as provided by the California Tenant Protection Act.

21.56.070. Application Requirements.

The conversion of rental housing into condominiums shall be subject to all applicable rules and regulations prescribed by the State Subdivision Map Act. In addition to exhibits as required by Martinez Municipal Code Section 21.42.060, the application shall also include details related to the following:

A. Location of each common area.

B. Location of each private open space.

C. Locations and dimensions of parking garages, carports, and individual parking spaces on the site.
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D. Location and dimension of exterior storage space for each individual unit.

E. Landscaping Plan.

F. Tenant Relocation Assistance Plan, as referenced in Section 21.56.060.

G. Tenant Information:

1. Names of current tenants, addresses, and the length of time they have rented the unit;

2. Rental history of each unit for the preceding three years; and

3. Current rental rate for each unit.

H. A draft copy of a declaration of the conditions, covenants, and restrictions which will apply and which shall include an agreement for common area maintenance, including facilities and landscaping together with an estimate of the initial assessment fees anticipated for such maintenance; a description of a provision for maintenance of vehicular access areas within the project; and an indication of appropriate responsibilities for maintenance of all utility lines and services for each unit.

I. Other information which, in the opinion of the Community and Economic Development Director and City Engineer, or designees, will assist in determining whether the proposed project is consistent with this Chapter.

21.56.080. Parkland Dedication fees.

Each unit shall be subject to full parkland dedication fees at the rate in effect at the time the final map is filed less parkland dedication fees previously paid to the City for that unit.

21.56.090. Inclusionary Housing Requirements
A. Applicability. Condominium conversions which result in the conversion of 11 or more rental units shall be required to comply with Chapter 22.82 (Inclusionary Housing).

B. Credit for Prior Inclusionary Zoning Complian ce. If the project was required to comply with the Inclusionary Zoning regulations at the time the project was originally constructed, then the project shall receive a credit towards its inclusionary housing obligation equal to the affordable housing requirement applicable at that time.

C. Existing Affordable Units. Any existing affordable units within the project created pursuant to the City’s Inclusionary Housing regulations shall remain affordable units for the remaining extent of their deed-restriction term.

D. In-Lieu Fee Credit Limitation. If Inclusionary Zoning in-lieu fees were paid rather than creating affordable units, the property owner shall be responsible for payment any difference between the previously paid in -lieu fees and the in -lieu fees required under the current Inclusionary Housing regulations.

21.56.100. Replacement Requirement.

In the event that 11 or more rental units are proposed for conversion to condominiums, then Applicants shall be required to provide one or a mix of the following:

A. Replacement Units.
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1. Ratio. The Applicant shall provide replacement rental dwelling units on a one-to-one basis for each rental dwelling unit proposed to be converted starting with the 11 th unit.

2. Location. The replacement units shall be on the same site as the converted project or at an alternative site within the City, subject to the approval of the Community and Economic Development Director, or designee.

3. Timing. The replacement units shall be available f or occupancy no later than the date of final conversion of the respective displaced tenant.

4. Comparable Units. The replacement units shall be comparable to the converted units with respect to:
a. An equal number of bedrooms and bathrooms;
b. Size and quality of construction;
c. Accessibility features; and
d. Rent less than or equal to the original rental unit.

5. Inclusionary Requirements. Replacement rental units required pursuant to this section shall not be credited toward compliance with the City’s Inclusionary Housing regulations, unless expressly permitted by those regulations.

B. In-Lieu Fee. Applicants may request to pay an in -lieu fee of all or some of the replacement units otherwise required. The in-lieu fee shall be calculated on a per -unit basis and be in an amount sufficient to mitigate the loss of rental housing that results from condominium conversions, in accordance with applicable law and as determined by the respective review authority.

1. Nexus Study. Applicants shall be responsible for preparation of a nexus s tudy demonstrating the relationship between the fee and the cost of providing the replacement housing and reflect the full cost of replacing a comparable rental dwelling unit, including land acquisition, construction, and soft costs . The nexus study shall be subject to review by City staff or peer review by a qualified consultant at the expense of the Applicant.

2. Timing. The in-lieu fee shall be paid prior to recordation of the final map.

3. Use of Fees. The in-lieu fees collected shall be deposited in the Affordable Housing Fund.

C. Alternative Means of Compliance . Alternative means of compliance for providing replacement units may be approved upon showing, supported by substantial evidence, that strict application of these replacement requirements would preclude any reasonable economic use of the property, subject to City Council approval.

D. Exceptions. Condominium conversion projects shall not be required to comply with these replacement requirements if:

1. At least 90 percent of condominium units are purchased by current tenants. 255

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2. Conversions to 100 percent housing units with long-term affordability restrictions for households earning 120 percent of Area Median Income (“AMI”) or less.

21.56.110. Procedures.

A. Projects Converting Less 10 or Fewer Rental Units. Projects wh ich propose to convert less than 10 rental units to condominiums shall be subject to approval by the Zoning Administrator.

B. Projects Converting 11 or More Rental Units. Projects which propose to convert 11 or more rental units to condominiums shall be subject to approval by the Planning Commission.

21.56.120. Appeal to City Council—Hearing.

The procedure involved in the appeal of a Planning Commission action is set forth in Section

21.42.100.

SECTION V. SEVERABILITY
If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases of this ordinance, or its application to any other person or circumstance. The City Council of the City of Martinez hereby declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases hereof be declared invalid or unenforceable.

SECTION VI. EFFECTIVE DATE
This ordinance shall become effective 30 days after the date of adoption.

SECTION VII. PUBLICATION
At least five days prior to its final adoption, a certified copy of the full text of this ordinance shall be posted in the office of the City Clerk.

Within fifteen days after adoption, the City Clerk shall publish a summary of this ordinance with the names of tho se City Council members voting for or against the ordinance in a newspaper of general circulation published and circulated in the City of Martinez.

APPROVED: ___________________________
Brianne Zorn, Mayor

ATTEST: __________________________
Kat Galileo, City Clerk
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* * * * *
I HEREBY CERTIFY that the foregoing ordinance was duly and regularly introduced at a regular meeting of the City Council of the City of Martinez, held on the 18th day of March, 2026, and duly passed and adopted at a regular meeting of said Council held on the 1st day of April, 2026, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

__________________________________

KAT GALILEO, CITY CLERK

CITY OF MARTINEZ

Approved as to form:

__________________________
Teresa L. Highsmith, City Attorney

257

STAFF REPORT
City Council

City Council Staff Report Page 1 of 6
Date: March 18, 2026
To: Mayor and City Council
From: Michael Chandler, City Manager
Prepared By: Brandon Northart, AICP, Associate Planner
Michael P. Cass, Assistant Community and Economic Development Director Title: Introduction and Adoption of Urgency Ordinance Amending Accessory Dwelling Unit and Junior Accessory Dwelling Unit Regulations

Recommendation
Conduct a public hearing and adopt an Urgency Ordinance approving Zoning Text Amendments to amend Chapters 22.04 (Definitions), 22.43 (Accessory Dwelling Units and Junior Accessory Dwelling Units), and 22.84 (Exceptions) to reflect recent updates to State law and feedback from the California Department of Housing and Community Development (“HCD”) related to accessory dwelling unit regulations.

Background
California Accessory Dwelling Unit Regulations
The State regulates accessory dwelling units (“ADUs”) and junior accessory dwelling units (“JADUs”) through Government Code Sections 66310 through 66342 by which each local agency is required to comply.

Government Code Section 66323
Government Code Section 66323, most recently amended in 2024, requires local agencies to ministerially approve applications for any applicable “State Exempt ADUs”. State Exempt ADUs are considered any of the following:

1. An attached ADU within the proposed or existing space of a single-family dwelling that’s no more than 800 square feet or 50 percent of the primary home (whichever is smaller), no taller than 25 feet in height, and no less than four-foot side and rear yard setbacks.

2. A detached ADU within the space of a proposed or existing structure that’s no more than 800 square feet with four -foot side and rear yard setbacks. New construction detached ADUs are limited to 18 feet , and additions to existing detached structures are limited to 25 feet.

3. An attached JADU converted from the existing space of a single-family dwelling that is no more than 500 square feet where an expansion beyond the physical dimensions of the existing structure is limited to accommodating ingress and egress for the JADU. 258

City Council Staff Report Page 2 of 6

4. ADUs subject the applicable unit restrictions on proposed and existing multifamily dwellings, including ADUs converted from existing non -habitable spaces and detached ADUs.

Local agencies are prohibited from imposing any objective development or design standard that is not explicitly authorized by Government Code Section 66323 (e.g., height, floor area, and side and rear setbacks).

Government Code Section 66326
Government Code Section 66326(a), most recently amended in 2024, requires local agencies submit a copy of their adopted ADU/JADU ordinance to HCD within 60 days after adoption. After adoption of an ordinance, HCD may submit a written determination to the local agency as to whether the ordinance complies with this article. If HCD finds that the local agency’s ordinance does not comply with State law, then HCD is required to notify the local agency and give them 30 days to respond. The local agency can either amend their respective ordinance to comply or adopt a resolution that explains why the local agency believes the existing ordinance complies despite HCD’s determination.

If the local agency does not amend its ordinance in response to HCD’s determination or does not adopt a resolution explaining the reason the ordinance complies with State laws, then HCD may notify the Attorney General that the local agency is in violation of State law.

Discussion
To comply with Government Code Section 66326, Planning Division staff (“staff”) sent the City’s ADU regulations to HCD after every adopted ordinance that amended ADU regulations , including on:
 August 14, 2023 (Ordinance No. 1447)
 June 12, 2024 (Ordinance No. 1458)
 March 27, 2025 (Ordinance No. 1463)
 April 4, 2025 (Ordinance No. 1469)
 December 15, 2025 (Ordinance No. 1474 and 1480)
Despite several submissions, the City only received formal comments from HCD in response to the December 2025 submission . HCD’s letter, dated January 6, 2026, cites several inconsistencies which are required to be resolved to comply with State law and avoid the repercussions described in Government Code Section 66326 . Following receipt of the letter, staff, in consultation with the City Attorney, responded to HCD on January 29, 2026. In addition, staff had a meeting with an HCD representative on February 2, 2026, to review their letter and seek clarification.

Based on this feedback , staff propose to amend the City’s ADU regulations via Urgency Ordinance to ensure that the proposed amendments take effect immediately to comply with all 259

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applicable State laws. An Urgency Ordinance requires that four out of five City Councilmembers approve the proposed Ordinance. The proposed amendments are summarized below:

1. Statutory Numbering : Previously, most of the prominent State ADU regulations were included in Government Code Sections 65852.2, 65852.22, and 65852.26. However, Senate Bill (“SB”) 477, which went into effect on March 25, 2024, modified these Sections and reorganized them into Government Code Sections 66310 through 66342. The City’s ADU regulations contain references to the old Government Code Sections. Staff propose amendments to ensure the correct Government Code Section citations are referenced .

Additionally, staff propose to add Section 22. 43.180 to reference successor provisions should the Government Code Sections change in the future.

2. Recent State Law: HCD cited several recent State law s that needed to be incorporated into the ADU regulations, specifically:
o Assembly Bill (“AB”) 130 (effective June 30, 2025)
o AB 462 (effective October 10, 2025)
o AB 1154 (effective January 1, 2026)
o SB 9 (effective January 1, 2026)
o SB 543 (effective January 1, 2026)
These various laws do many things, but only AB 462, AB 1154, and SB 543 require any amendments. AB 462 allows ADUs to be permitted before a primary dwelling if they are located within an area declared as a State of Emergency by the Governor ( for which Martinez is not currently). AB 1154 removes owner occupancy requirements from JADUs if the JADU has independent sanitation facilities. SB 543 clarifies that JADUs are limited to 500 square feet of “livable area ” and limits impact fees for ADUs/JADUs to be proportional to the size of the unit. Staff propose amendments to reflect these three recent State laws.

3. Unit Allowance: HCD provided several comments related to how many ADUs/JADUs are permitted on single-family and multifamily lots. The existing and proposed amendments are summarized below:
o Lot with one or more single-family dwelling:
 Existing: Up to one ADU total (either attached or detached) and one JADU.  Amended: Up to one attached ADU, one detached ADU, and one JADU.

While Planning Division staff and the City Attorney disagree with HCD’s interpretation of allowing “all” three types of the allowable ADUs/JADUs, the City has agreed to make the change as this interpretation has been applied at multiple local jurisdictions and since the City is supportive of generating additional ADUs/JADUs.
o Lot with an existing multifamily dwelling:
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 Existing: Up to eight detached ADUs, respective of the number of existing multifamily units or ADUs converted from non -habitable portions of the structure up to 25 percent of the existing multifamily units.  Amended: Up to eight detached ADUs, respective of the number of existing multifamily units, ADUs converted from non -habitable portions of the structure up to 25 percent of the existing multifamily units, and one additional ADU.
o Lot with a proposed multifamily dwelling:
 Existing: Up to two detached ADUs.
 Amended: Up to two detached ADUs and one additional ADU.

4. Front Setbacks: State law prohibits local agencies from enforcing front yard setbacks on State Exempt ADUs. The City’s existing regulations currently allows State Exempt ADUs in front setback areas, but specifies that non-State Exempt ADUs are subject to the front yard setback regulations associated with the underlying zoning district. After discussions with HCD, the consensus was the City’s existing regulations do not violate any State law and no amendments are necessary.

5. Stories/Height: When staff sought feedback from the City Council in 2023 while preparing the first major revamp of ADU regulations, it was staff’s interpretation the City could not limit State Exempt ADUs height, but did have some discretion related to restricting stories.

As such, staff implemented the City Council’s recommendation that detached ADUs either be a one -story structure or a second -story addition to an existing structure to preserve adjacent neighbors’ privacy . However, HCD has determined local agencies are not permitted to restrict stories on ADUs – only height. As such, staff propose to remove these restrictions.

6. Parking Exceptions: State law provides that ADUs are exempted from having a dedicated parking space under several criteria. The City’s existing ADU regulations include most of these exceptions, but HCD determined one of the criteria needed clarification. ADUs are exempted from providing parking when it is built without a bedroom (such as a studio or efficiency unit) , whereas existing regulations only specified a studio unit . HCD also determined that one of the criteria was missing, including when an application for an ADU is submitted with an application to create a new single -family or multifamily dwelling on the same lot , as long as the ADU or the parcel satisfies any of the other parking exceptions. While not substantive changes, s taff propose to amend the parking exemptions to reflect these requirements.

7. Visibility: State law only allows local agencies to impose certain objective standards on non-State Exempt ADUs. The existing ADU regulations prohibit exterior staircases from being visible from the right-of-way; however, HCD determined that this requirement was not objective and needed to removed. As such, staff propose to remove this standard to reflect this requirement.
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8. Owner Occupancy : The City’s existing ADU regulations require owner occupancy of dwellings with JADUs of either the primary dwelling or JADU in most circumstances.

However, State law provides a new exemption to this requirement if the JADU has independent sanitation facilities. As such, s taff propose to amend these regulations to reflect this requirement.

In addition to the amendments required by HCD, staff also propose several other minor edits.

1. State Exempt ADUs : The existing ADU regulations inconsistently use the terminology “Statewide Exemption ADU” and “State Exempt ADU”. HCD documentation refers to these as State Exempt ADUs, so staff propose to amend the City’s regulations to use this term consistently.

2. Exceptions: The existing ADU Chapter includes findings to allow for exceptions to some development standards. However, the City has since adopted a dedicated Chapter in the Zoning Ordinance for Exceptions for all development projects, including ADUs. As such, staff propose to remove the findings from the ADU Chapter and strictly rely on the findings from the dedicated Exceptions Chapter. This change will ensure consistency when and if the Martinez Municipal Code is amended in the future.

3. Sightline Distance Requirements: As described above, the City is unable to enforce front yard setbacks on State Exempt ADUs. However, State law does allow for exceptions if a standard would present a hazard to health and safety. Staff recently encountered a project which proposed an ADU in the front yard of a corner lot that would have violated local and State laws pertaining to preserving sightlines at right-of-ways. After staff pushed back to protect public safety, HCD determined the City can prohibit ADUs in sight distance areas. As such, staff propose to codify this requirement.

4. Additional ADUs for Bonus Program and Religious Institutions: As described above, State law now permits an additional ADU, for a total of up to three ADUs/JADUs, on properties with a single -family dwelling. As such, staff are recommending to update some of our other discretionary ADU programs to account for this additional ADU for consistency. a. ADU Bonus Program: Currently, the ADU Bonus Program allows Applicants that are proposing to deed-restrict an ADU for affordable housing, up to one additional ADU for a total of three ADUs in areas not located within a Transit Priority Area .

Staff propose to update these regulations so they now would allow up to four ADUs, including the bonus ADU , as the Housing Elem ent requires the City to maintain an ADU Bonus Program that allows additional ADUs beyond State law .

The regulations for the Bonus Program within a Transit Priority Area are not proposed to be changed.
b. Religious Institution: Currently, the City allows lots with religious institutions up to two ADUs. Staff propos e to update these regulations so they would now be permitted up to three ADUs.
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In response to HCD ’s letter and following the meeting with HCD, staff sent the proposed revisions to HCD for review, ideally to seek their feedback before they went to the City Council for potential adoption to ensure the regulations won’t require additional revisions. HCD commented they typically only review adopted Ordinances and have not provided comments on the proposed amendments beyond their letter and discussion with staff.

Compliance with City of Martinez 4-Year Strategic Plan
The proposed Zoning Text Amendments are consistent with Goal C: Economic Development and Housing in the City’s Four-Year Strategic Plan, since it would continue to ensure the City remains compliant with State housing laws and the City’s 2023-2031 Housing Element.

Public Noticing and Outreach
The City published a “Notice of Public Hearing” in the Contra Costa News Register, was posted at City Hall, was posted on the City’s website, and was mailed via first class or electronic mail to individuals who had previously filed written request for such notice a minimum of 10 days in advance of the public hearing.

Environmental Review
The proposed Ordinance is exempt from the requirements of the California Environmental Quality Act (“CEQA”) to Public Resource Code Section 21080.17 and Section 15282(h) of the CEQA Guidelines, which exempts the adoption of an ordinance regarding ADUs to implement provisions of Government Code Sections 65852.2 and 65852.22 (which have since been replaced by Government Code Sections 66310 through 66342).

Fiscal Impact
The City’s budget sufficiently covers the cost of preparing the proposed regulations.

Attachments
 Draft Urgency Ordinance – Accessory Dwelling Units and Junior Accessory Dwelling Amendments
 Attachment A – Tracked Changes Version of Proposed Code Amendments  Attachment B – HCD ADU Regulations Determination Letter, dated January 6, 2026  Attachment C – City of Martinez Response Letter to HCD, dated January 29, 2026

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ATTACHMENT A – TRACKED CHANGES VERSION OF PROPOSED CODE AMENDMENTS

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CHAPTER 22.04 DEFINITIONS

22.04.030. Definitions (A—Z).

Accessory dwelling unit, statewide exemption.

A "statewide exemption ADU" is an ADU or JADU of up to 800 square feet, has four-foot side and rear yard setbacks, and complies with the height limitations of Section

22.43.070consistent with Government Code Section 66323. State ADU Law requires that no lot coverage, floor area ratio, open space, or minimum lot size will preclude the construction of a Statewide Exemption ADU.

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CHAPTER 22.43 ACCESSORY DWELLING UNITS AND JUNIOR ACCESSORY DWELLING UNITS

22.43.010. Intent.

This Chapter is intended to comply with State Law (including, but not limited to, California Government Code Sections 66310 through 66342), by allowing accessory dwelling units (ADU) and junior accessory dwelling units (JADU) through ministerial review, su bject to meeting the objective design and development standards prescribed below. In the event of any conflict or inconsistency between this Chapter and State law or other Sections in the Municipal Code, the more permissive regulations shall prevail.

22.43.020. Where permitted.

A. A. Any ADU may be permitted:

1. On any lot zoned for a residential use, or any non -residentially zoned lot which is currently occupied with a single-family dwelling or multiple-family dwellingmultifamily dwellings.

2. On any lot zoned or occupied by a religious institution, as defined in Chapter 22.04.

B. ADUs shall not be located in the following locations:

1. In areas encumbered by a recorded easement, including but not limited to, public utility easements, conservation easements, access easements, pedestrian pathway easements and open space easements; or

2. In areas that extend into a creek bank.

22.43.030. Quantity of units.

The following number of ADUs and JADUs shall be the maximum number of accessory units permitted on lots subject to this Section.

A. Lot with one single -family dwelling unit: one detached ADU, one attached ADU, and one JADU.

B. Lot with more than one legal, conforming single-family dwelling unit: one detached ADU total, one attached ADU, and one JADU.

C. Lot with an existing multiple-family dwellingmultifamily dwellings, either:

1. Up to eight detached ADUs, but shall be limited to the number of existing multifamily dwelling units on the lot; or

2. At least one ADU converted from non -habitable portions of the existing primary structure that are not within the living space of a dwelling unit (e.g., basement, attic, garages storage room).) or the non-residential portions of a mixed-use building. The maximum number of ADUs converted from portions of the existing primary structure that are not within the living space of a dwelling unit shall not exceed 25 percent of the total number of existing dwelling Unitsunits on the lot; and 266

2.3. One additional attached or detached ADU subject to the development standards provided in this Chapter. .

D. Lot with a proposed multiple-familymultifamily dwelling:

1.D. Up unit: up to two detached ADUs and one additional attached or detached ADU subject to the development standards provided in this Chapter.

E. Lot with religious institution: up to twothree ADUs, subject to the following exceptions:

1. When a lot contains a religious institution and a single -family and/or multiple- familymultifamily dwelling, the maximum number of ADU(s) permitted shall be associated with only one of the uses, whichever permits more.

2. When a religious institution occupies multiple lots, only one of these lots shall be eligible for the ADU(s).

22.43.040. Unit size.

A. Minimum size. An ADU/JADU shall be a minimum of 150 square feet or the size necessary to accommodate an efficiency unit as defined by California Health and Safety Code Section 17958.1, whichever is greater.

B. Maximum size.

1. ADU. The total floor area of an attached or detached ADU shall not exceed 1,200 square feet, excluding any garage area. Non -statewide exemption State Exempt ADUs shall have a floor area smaller than the primary dwelling. In no case shall an ADU attached to the primary dwelling exceed 50 percent of the existing primary dwelling square footage, except a Statewide ExemptionState Exempt ADU shall be permitted.

2. JADU. The total floor area of a JADU shall not be more than 500 square feet of interior living space , excluding any shared sanitation facility within the primary dwelling structure.

C. Conversion restrictions. A JADU created entirely through conversion of an existing permitted structure is allowed a physical addition of no more than 150 square feet and shall be limited to accommodating ingress and egress, subject to all other applicable provisions of this Chapter. The conversion of an existing permitted accessory structure or a portion of an existing primary structure to an ADU is not subject to unit size requirements.

D. Lot coverage and floor area ratio. Newly constructed ADUs shall be exempt from the maximum lot coverage or floor area ratio allowed in the zoning or overlay district.

22.43.050. Setbacks.

A. Front. Both attached and detached Non-State ExemptionExempt ADUs shall be subject to the same front setback requirements as the primary dwelling.

B. Side. A setback of no less than four feet from the side lot line shall be required for either an attached or detached ADU.
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C. Rear. A setback of no less than four feet from the rear lot line shall be required for either an attached or detached ADU.

D. Expansion of converted existing structures. The first floor of an existing permitted structure which has setbacks of less than four feet and is planned for conversion into an ADU can be expanded, so long as the expansion does not result in additional encroachment into the required setbacks.

E. Architectural features. Architectural features including sills, eave overhangs, awnings, and cornices may extend into a required setback or space between buildings not more than 18 inches.

22.43.060. Building separation055. Sight Distance.

Both attached and detached ADUs shall not encroach within the sight distance area, as established by the California Department of Transportation Highway Design Manual, Chapter 400, Section 405, to protect the health and safety of the public.

22.43.060. Building separation.

A. Non-state exemptionState Exempt ADU. For any detached ADU which does not qualify as a State Exemption ADU, the distance between the ADU and any other structures shall be at least five feet.

B. State exemptionExempt ADU. Detached ADUs located closer than five feet to any other structures without an automatic residential fire sprinkler system shall be subject to a minimum of one-hour fire-resistance rating and shall comply with all California Building Code and California Fire Code fire-rating requirements.

22.43.070. Height.

Building height shall be measured as the vertical distance from any point on the natural grade, to the topmost point of the building immediately above.

A. Detached ADU.

1. New construction. A maximum height of 18 feet for a new detached ADU shall be permitted. An additional two feet in height to accommodate a roof pitch on the ADU that is aligned with the roof pitch of the primary dwelling unit shall also be permitted.

2. Addition to an existing detached structure. An ADU which results in an addition to an existing detached structure that is not the primary dwelling shall have a maximum height of 25 feet or the height limitation associated with the primary dwelling, whichever is lower, and shall not exceed two stories.

3. Restrictions. A Detached ADU shall be either a one-story structure or second-story addition to an existing legal structure.

B. Attached ADU. A maximum height of 25 feet or the height limitation associated with the primary dwelling, whichever is lower, shall be permitted for an ADU that is attached to a primary dwelling.

22.43.080. Parking.
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A. Minimum parking. A minimum of one independently usable off -street parking space shall be provided for each ADU, which shall be provided in addition to the required parking for the primary residential dwelling(s), except as outlined in Subsections C and D. No parking is required for a JADU.

B. Parking design. This space need not be covered, and shall comply with all development standards set forth in Chapter 22.36 (Off-Street Parking and Loading Facilities), except the space may be compact and/or uncovered. A tandem parking space may also be used to meet the parking requirement for an ADU, providing such space will not encumber access to a required parking space for the primary single-family dwelling.

C. Replacement parking. When a garage, carport, or covered parking structure is demolished or converted in conjunction with the construction of an ADU or JADU, no parking replacement spaces for the primary residence shall be required. Any other required off-street parking spaces shall be maintained for the primary residence, and may be located in any configuration on the same lot as the ADU, including, but not limited to, as covered spaces, uncovered spaces, or tandem spaces, or by the use of mechanical automobile parking lifts. A demolition permit for a detached garage that is to be replaced with an accessory dwelling unit shall be reviewed with the building permit application for the accessory dwelling unit and issued at the same time. The applicant is not required to provide written notice or post a placard for the demolition of a detached garage, that is to be replaced with an accessory dwelling unit, unless the p roperty is located within the Historic Overlay District or another architecturally and historica lly significant historic district.

D. Parking exceptions. Off -street parking shall not be required for an ADU in any of the following instances:

1. The ADU ishas no bedroom (such as a Studio Unit.studio unit or efficiency unit).

2. The ADU is located within one-half mile walking distance of public transit, including various means of transportation that charge set fees, run on fixed schedules, and are available to the public.

3. The ADU is located within the Historic Overlay District or another architecturally and historically significant historic district.

4. The ADU is part of the proposed or existing primary dwelling or an accessory structure.

5. When on-street parking permits are required but not offered to the occupant of the ADU.

6. When there is a designated pick-up or drop-off location for car share vehicles located within one block of the ADU.

7. The ADU is consistent with affordability requirements outlined in Section 22.43.140.

8. When a building permit application for an ADU is submitted with a building permit application to create a new single -family dwelling or a new multifamily dwelling on 269

the same lot, provided that the accessory dwelling unit or the parcel satisfies any other criteria listed under these parking exceptions.

22.43.090. Design standards.

The following design standards shall apply to all Non-State ExemptionExempt ADUs:

A. Aesthetics. The design of the ADU and/or JADU shall be as follows:

1. For a detached ADU, the exterior materials and design shall match the design of any existing primary unit on the property through the use of the same exterior wall materials, identified color tones, window types, door and window trims, roofing materials an d roof pitch. The Community and Economic Development Director, Planning Manager, or designee may determine without the requirement for a public hearing or a public review process that similar materials and design substantially comply with this requirement.

2. For an attached ADU, the exterior materials, windows, and other architectural features shall match the existing structure by employing the same building form, exterior wall materials, color tones, window design, door and window trims, roofing materials and roof pitch. The Community and Economic Development Director, Planning Manager, or designee may determine without the requirement for a public hearing or a public review process that similar materials, windows, or other architectural features substantially comply with this requirement.

B. Lighting. Exterior building lighting shall be fully shielded and downward -facing and limited to one exterior light fixture per exterior doorway, or the minimum necessary to comply with the California Building Standards Code.

C. Utility connections. All electrical and utility services to a new dwelling unit shall be undergrounded.

22.43.100. Ingress and egress.

A. ADUs and JADUs shall have an independently accessible entrance that does not require passage through the primary residence.

B. With the exception of JADUs that do not include separate sanitation facilities, attached ADUs shall not be allowed a connecting doorway or other permanent ingress or egress between the primary dwelling and the ADU.

C. Unless it would preclude the development of a Statewide Exemption ADU, an exterior stairway proposed to serve an ADU or JADU on a second story or higher shall not be visible from the public right -of-way. Access to a first story dwelling by stairs or ADA accessible ramp may be permitted in the front of the primary dwelling.

D.C. A JADU created entirely through conversion of an existing permitted structure is allowed a physical addition of no more than 150 square feet and shall be limited to accommodating ingress and egress consistent with the remainder of this Chapter.

22.43.110. Privacy.

The following privacy standards shall apply to all Non-State Exempt ADUs:
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A. Windows. ADUs that do not meet the setback requirements that would apply to a primary dwelling in the same district shall require windows on the second story or above that face neighboring property lines to:

1. Be clerestory with a minimum sill height of six feet above the subject interior floor elevation; or

2. Have frosted or opaque glass and not be operable except as required for an ingress/egress requirement pursuant to the California Residential Code.

B. Balconies and decks. Balconies and decks attached to ADUs shall comply with the setback requirements that apply to a primary dwelling in the same district.

22.43.120. General requirements.

A. Compliance with building codes. All ADUs and JADUs shall comply with all applicable requirements of the building code as adopted and enforced at time of submitting a complete application. In cases where an ADU or JADU is to be created through the reconfiguration of a portion of an existing single -family dwelling, both the secondary and primary dwelling shall be upgraded to comply with such building code requirements, which include but is not limited to noise separation between units sharing common walls, emergency egress and heating/ventilation requirements, as required by the Chief Building Official or designee.

B. Final Building Permit. A Final Building Permit for an ADU/JADU shall not be permitted before a Final Building Permit is issued for the respective primary dwelling, unless the ADU is constructed in a county that is subject to a proclamation of a state of emergency made by the Governor on or after February 1, 2025 , if the primary dwelling was substantially damaged or destroyed by an event referenced in the state of emergency, and the ADU has been issued construction permits and passed all required inspections.

B.C. Permanent foundation. A permanent foundation shall be required for all attached and detached ADUs and for any ADU or JADU created entirely through conversion to the existing structure with a physical addition.

C.D. Public utilities and services. ADUs shall be served by public water and sewer and shall have access to an improved public street.

D.E. Required facilities. With the exception of JADUs, all attached or detached ADUs must include:

1. Independent facilities for living, sleeping, cooking, and sanitation.

2. A kitchen area containing a refrigerator, sink, and permanently installed cooking appliance, which must include at least a fixed stovetop.

3. A fully plumbed bathroom including sink, shower, and toilet.

4. If a permitted JADU does not include a separate bathroom, the JADU must include a separate entrance from the main entrance to the structure, with an interior entry to the main living area.

E.F. Fire sprinklers. All newly constructed or converted ADUs are required to have automatic residential fire sprinklers consistent with California Residential Code Section R313.2, 271

unless the existing primary structure was constructed prior to the requirement for automatic residential sprinkler system. The construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the existing primary dwelling.

F.G. Windows. Detached ADUs with a wall(s) located closer than five feet to a primary dwelling shall not include any openings such as windows or doors on the subject wall(s).

G.H. Occupancy. ADUs and JADUs may be rented separately from the primary dwelling—Dwellings with ADUs do not require owner occupancy of either the primary dwelling or ADU. Dwellings with JADUs require owner occupancy of either the primary dwelling or the JADU if the JADU has shared sanitation facilities with the existing structure, but shall not be required if the JADU has separate sanitation facilities or the owner is another governmental agency, land trust, or housing organization. No ADU or JADU shall be rent ed for a period of less than 31 days and cannot be occupied as a short-term rental unit.

H.I. Conveyance. ADUs may be separately conveyed as condominiums under the following requirements.

1. Non-Profit Conveyance: The involvement of qualified nonprofit housing organizations consistent with California Government Code Sections 65852.2 and 65852.26Section 66341.

2. Private Conveyance: An attached ADU may be conveyed separately from a primary dwelling via a private transaction with implementation of a condominium plan. The conveyance of the ADU shall also comply with Government Code Section 65852.266341, the Subdivision Map Act (Division 2 (commencing with Section 66410)), and all objective requirements of Martinez Municipal Code Title 21.

I.J. Common sanitation facilities. JADUs are permitted to have common sanitation facilities with the primary dwelling. Any JADU with common sanitation facilities shall have interior access to the primary dwelling.

J.K. Protected trees. Where an ADU is proposed within the dripline of a protected tree, as defined in Section 8.08.044, an arborist report prepared by a licensed arborist shall be required and all ensuing recommendations shall be followed.

K.L. Hillside properties. For areas with slopes greater than 30 percent, the preparation of a geotechnical investigation report shall be required and all ensuing recommendations shall be followed.

22.43.130. Exceptions.

A. Exceptions may be granted. The Zoning Administrator may grant an exception to height, size, setback, sight distance, building separation, parking, ingress and egress, privacy, and design standards consistent with the procedures set forth in Section

22.06.020 and subject to the following findings:Chapter 22.45 (Exceptions):

1. The project will substantially comply with the Zoning Ordinance and the purpose and intent of the zoning district where the property is located. 272

2. The project will not pose a detrimental impact to the site, adjacent properties, or neighborhood.

3. The project will otherwise comply with applicable Zoning Ordinance standards and requirements.

B. Limitations of this section. Consistent with California Government Code Section 65852.266323, this Section shall not preclude or impede the development of any Statewide Exemption State Exempt ADU and in compliance with all other local development standards.

22.43.140. ADU bonus program.

A. Applicability. Applicants that are proposing to deed -restrict an ADU to the following affordability levels are eligible for the bonuses described below:

1. Moderate-Income, deed-restricted: Provide affordability between 80 to 120 percent of area median income with affordability restrictions in place for 55 years.

2. Lower-Income, deed-restricted: Provide affordability at less than 80 percent of area median income with affordability restrictions in place for 35 years.

B. Bonuses. The Community and Economic Development Director, Planning Manager, or designee shall approve the following exceptions:

1. For ADU(s) consistent with the affordability requirements outlined in subsection A:
a. If the project is located in within a Transit Priority Area, defined by California Public Resources Code Section 21099(a)(7) as an area within one-half mile of a major transit stop that is existing or planned, the applicant shall be allowed one additional unrestricted ADU for every deed-restricted ADU with no limits so long as the respective amount of deed-restricted ADUs is provided, subject to space limitations and compliance with other standards and requirements of this chapter. b. If the project is not located within a Transit Priority Area, the limit shall be one deed-restricted and one additional unrestricted ADU, for a maximum of threefour ADUs.

2. Waiver from another development standard listed in this chapter that would otherwise make development of a deed-restricted ADU infeasible.

C. Requirements. Property owners shall work with the City and Housing Authority of the County of Contra Costa (HACCC) to establish an affordable housing program, which at a minimum shall establish tenant eligibility, income verification and reporting requirements, and procedures for when a tenant's income raise beyond income limits.

22.43.150. Application requirements.

An application for an ADU or JADU shall be allowed with a building permit. In addition to the normal building permit submittal requirements, a completed application must include, at a minimum:

A. Site plan.
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1. Drawn to scale.

2. Dimensions of the perimeter of parcel on which the proposed dwelling will be located.

3. Indicate the location and dimensioned setbacks of all existing, proposed, and adjacent structures abutting the project site.

4. Data on the floor space of the existing structure(s) and proposed unit.

5. All easements, building envelopes, and special requirements of the subdivision as shown on the final map and improvement plans shall be included.

6. Provide average slope calculations for the project site.

7. Calculations indicating the square footage of the structure and the lot, including calculations on the plan for the percentage of lot area covered by the foundation of the existing and proposed dwelling units.

B. Floor plans.

1. Each floor and room shall be dimensioned, and the resulting floor area calculation included.

2. The use of each room shall be identified.

3. The size and location of all windows and doors shall be clearly depicted.

C. Elevation views.

1. Provide north, south, east, and west elevations.

2. Show all heights for all existing and proposed structures on site. Height shall be calculated as the vertical distance of a building at any point, within a given plane, from finished grade to the top of the roof or parapet walls.

3. Show all openings, exterior finishes, original and finish grades, stepped footing outline, roof pitch, and materials.

4. For ADUs and/or JADUs that include modifications to the exterior of the primary structure or new construction, provide elevations showing all openings, exterior finishes, original and finish grades, stepped footing outline, roof pitch, materials and color board for the existing primary structure and the proposed unit.

22.43.160. Review and approval authority.

A. Application to be administratively approved. All ADUs and JADUs require a building permit. The building permit will be reviewed for compliance with applicable building codes, California Government Code Section 65852.2 and 65852.22 Sections 66310 through 66342 , and development and design standards from this Section. If an application to create an ADU or JADU is submitted as part of a project that requires discretionary review, a Building Permit shall not be issued for the ADU or JADU until the discretionary approval(s) has/have been granted and any applicable appeal periods have expired.
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B. Approval of preapproved ADU. The City shall approve or deny an application for an ADU ministerially within 30 days if the proposed ADU plans utilize either preapproved project plans provided on the City's website or if the plans are identical to a separate and previously approved application.

C. Approval of unit does not permit land division. Approval of an ADU or JADU shall not be deemed to be a division of land for purposes of California Government Code Section 66410 et seq. or Title 21 of the Municipal Code, nor shall the administrative approva l above entitle the applicant to either: (a) such a division of land; or (b) to have each of the dwelling units on the parcel separately assessed for property tax purposes.

22.43.170. Amnesty for unpermitted ADUs and JADUs.

See Chapter 15.55 (Residential Amnesty Program for Unpermitted Dwelling Units) for regulations related to legalizing unpermitted dwelling units.

22.43.180. Successor provisions.

All references to State statutes include successor provisions.

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CHAPTER 22.45 EXCEPTIONS

22.45.020 Applicability.

A. Minor Exceptions. A minor exception to the development standards listed in Table

22.45.020(A) shall be approved if the Community and Economic Development Director, Planning Manager, or designee can make the findings identified in Section 22.45.040A.

If a minor exception is requested as part of another planning application, then the minor exception will be considered by the review authority reviewing the planning application in question.

Table 22.45.020(A) – Minor Exceptions
Type of Exception Maximum Deviation Permitted with Minor Exception Building Height Up to a maximum of five feet above the existing limitation, as measured from the base flood elevation for primary
structures and up to two feet for accessory structures
Fence or wall height Up to a maximum of two feet above the existing limitation, and all portions of fence or wall taller than six feet must be lattice or similar open style of material
Required setbacks Up to a maximum of 10 feet or 25% of the normally required setback, whichever is less
Floor area ratio (“FAR”) Up to a maximum of 0.1 FAR or 500 square feet above the existing limitation, whichever is greater
Lot coverage Up to a maximum of 10% or 500 square feet above the existing limitation, whichever is greater
Distance between structures Up to a maximum of zero feet separation between structures on the same lot
Lot size Up to a maximum of 10% below the existing requirement Lot width or depth Up to a maximum of 10% below the existing requirement Sign Size Up to a maximum of 20% above the existing limitation Accessory Dwelling Units Exceptions to height, size, setback, sight distance, building separation, parking, ingress and egress, privacy, and design standards, consistent with this Chapter and Section

22.43.130 (Exceptions).

B. Major Exceptions. An exception beyond the maximum permitted deviations listed in Table 22.45.020(A) may be permitted through participation in the Development 276

Incentives and Community Benefits Program, pursuant to the regulations found in Chapter 22.81 (Development Incentives and Community Benefits Program). A major exception, beyond what is permitted by the Development Incentives and Community Benefits Program, may be approved by the Planning Commission or Zoning Administrator if the project participates in the Development Incentives and Community Benefits Program and if the Planning Commission or Zoning Administrator can make the findings identified in both Sections 22.45.040A and B.

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STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

DIVISION OF HOUSING POLICY DEVELOPMENT
651 Bannon Street, Suite 400
Sacramento, CA 95811
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov

January 6, 2026

Brandon Northart, Associate Planner
Planning Department
City of Martinez
525 Henrietta
Martinez, CA 94553

Dear Brandon Northart:

RE: Review of Martinez’ Accessory Dwelling Unit (ADU) Governance under State ADU Law (Gov. Code, §§ 66310 - 66342)

Thank you for submitting the City of Martinez (City) ADU Governance as codified in Chapter 22.43 of the City’s Municipal Code to the California Department of Housing and Community Development (HCD). HCD has reviewed the Municipal Code and submits these written findings pursuant to Government Code section 66326, subdivision (a).

HCD finds that the Municipal Code fails to comply with State ADU Laws in the manner noted below. Pursuant to Government Code section 66326, subdivision (b)(1), the City has up to 30 days to respond to these findings. Accordingly, the City must provide a written response to these findings no later than February 5, 2026 with a plan to either amend the current Municipal Code or adopt a resolution with findings. 1 Responses
should be submitted formally on agency letterhead.

The Municipal Code addresses many statutory requirements; however, HCD finds that it does not comply with State ADU Law as follows:

1. Statutory Numbering - The Municipal Code contains several references to statutory sections that were deleted by SB 477, effective March 25, 2024.

These include Government Code sections 65852.2, 65852.22 and 65852.26.

These sections were amended and relocated to Government Code, Title 7, Division 1, Chapter 13. The City must amend the Municipal Code to refer to the correct Government Code sections.

2. Please note, there is recent legislation that amended State ADU Law. These changes must be incorporated into the City’s Municipal Code as it is updated, specifically, bills referenced below:
• Assembly Bill (AB) 130 – Effective June 30, 2025
• AB 462 – Effective October 10, 2025
• AB 1154 – Effective January 1, 2026

1 Gov. Code, § 66326, subd. (b)(2)(B).
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Brandon Northart, Associate Planner

• Senate Bill (SB) 9 – Effective January 1, 2026
• SB 543 – Effective January 1, 2026

3. Section 22.43.030 – Unit Allowance – The Municipal Code allows one ADU and one JADU on a lot with a single-family primary dwelling and allows either converted units or detached units on a lot with a multifamily primary dwelling.

This limits ADU allowances to only one ministerially approved ADU pursuant to Government Code section 66323, subdivision (a), which is inconsistent with ADU Law and fails to reflect maximum allowances for single-family primary dwelling lots and multifamily primary dwelling lots, respectively. Government Code section 66323, subdivision (a), states, “Notwithstanding Sections 66314 to 66322, inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following: (1) One accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing single-family dwelling…Subparagraph (A) provides that “The accessory dwelling unit or junior accessory dwelling unit is within the proposed space of a single-family dwelling or existing space of a single-family dwelling or accessory structure.”

Paragraph (2) further permits “[o]ne detached, new construction, accessory dwelling unit that does not exceed four-foot side and rear yard setbacks.” The use of the term “any” followed by an enumeration of ADU types permitted under Government Code section 66323 means that any of these ADU types can be combined on a lot zoned for single-family dwellings. This permits a homeowner to create one converted ADU; one detached, new construction ADU; and one junior accessory dwelling (JADU). Thus, if the local agency approves an ADU that is created from existing (or proposed) space, and the owner subsequently applies for a detached ADU (or vice versa) that meets the size and setbacks pursuant to Government Code section 66323, subdivision (a), the local agency must approve the application. Therefore, the City must amend the Municipal Code to provide the opportunity for the maximum number of ADU/JADU combinations described in Government Code section 66323 for single family and multifamily dwellings.

Government Code section 66323, subdivision (a)(4)(A) authorizes, (ii) on a lot with an existing multifamily dwelling, “…not more than eight detached accessory dwelling units not to exceed the number of existing units on the lot, and (iii) on a lot with a proposed multifamily dwelling, not more than two detached accessory dwelling units.” The City’s Municipal Code inaccurately reflects the units and formats described in Government Code section 66323, subdivision (a). In addition, units created subject to Government Code section 66314 mus
t also be reflected in the Municipal Code to enable maximum unit allowances for both single-family dwellings and multifamily dwellings. The City must amend its Municipal Code to include units subject to Government Code section 66314 as well as all combinations required by section 66323 to achieve the maximum number of ADU/JADU combinations required by State ADU Law.

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Brandon Northart, Associate Planner

4. Section 22.43.050 (A) – Front Setbacks – The Municipal Code states, “Both attached and detached Non-State Exemption ADUs shall be subject to the same front setback requirements as the primary dwelling.” However, Government Code section 66321, subdivision (b)(3) prohibits “Any requirement for a zoning clearance or separate zoning review or any other minimum or maximum size for an accessory dwelling unit, size based upon a percentage of the proposed or existing primary dwelling, or limits on lot coverage, floor area ratio, open space, front setbacks, and minimum lot size, for either attached or detached dwellings that does not permit at least an 800 square foot accessory dwelling unit with four-foot side and rear yard setbacks to be constructed in compliance with all other local development standards.” Additionally, local design standards such as front setbacks may not preclude units subject to and approved pursuant to Government Code section 66323. Therefore, the City must amend its Municipal Code to remove any setback requirement greater than four-foot side and rear yard, and where applicable, less than four feet, consistent with all accessory dwelling unit and junior accessory dwelling unit combinations authorized by Government Code section 66323, as well as specify all statutory exceptions for front setbacks.

5. Section 22.43.070 (A)(3) – Stories – The Municipal Code states, “A Detached ADU shall be either a one-story structure or second story addition to an existing legal structure.” However, height allowances in State ADU Law are only allowed by feet;
2 ADUs may not be restricted to a single story. The City must amend the Municipal Code to remove this section and reflect State ADU Law.

6. Section 22.43.080 (D) – Parking Exceptions – The Municipal Code provides for an exception to parking requirements under certain circumstances but omits two: no parking may be required with an ADU without a bedroom (such as a studio unit or efficiency unit)3 or “When a permit application for an accessory dwelling unit is submitted with a permit application to create a new single-family dwelling or a new multifamily dwelling on the same lot, provided that the accessory dwelling unit or the parcel satisfies any other criteria listed in [Government Code section 66322, subdivision (a)(5)].” The City must amend the Municipal Code to add complete parking exceptions.

7. Section 22.43.100 (C) – Visibility – The Municipal Code states that an exterior staircase for an ADU “shall not be visible from the public right-of-way”.

However, Government Code section 66314, subdivision (b)(1) allows the local agency to only “Impose objective standards on accessory dwelling units that include, but are not limited to, parking, height, setback, landscape, architectural review, maximum size of a unit, and standards that prevent adverse impacts on any real property that is listed in the California Register of Historical Resources.” The City’s requirement that an ADU’s staircase not be visible from any public right-of-way is subjective and therefore in violation of State ADU Law. The City must amend the Municipal Code to remove this requirement.

2 Gov. Code, § 66321, subd. (b)(4).
3 Gov. Code, § 66314, subd. (d)(10); Gov. Code, § 66322, subd. (a)(3). 280 Brandon Northart, Associate Planner

8. Section 22.43.120 (G) – Owner Occupancy – The Municipal Code states “Dwellings with JADUs require owner occupancy of either the primary dwelling or the JADU, but shall not be required if the owner is another governmental agency, land trust, or housing organization.” However, Government Code section 66333, subdivision (b) requires owner occupancy only “If the junior accessory dwelling unit has shared sanitation facilities with the existing structure…” The City must amend the Municipal Code to add this condition.

The City has two options in response to this letter.
4 The City can either 1) amend the
Municipal Code to comply with State ADU Law5 or 2) adopt the Municipal Code without changes and include findings in its resolution accompanying the Municipal Code that explain the reasons the City believes that the Code complies with State ADU Law despite HCD’s findings.6 If the City fails to take either course of action, or if HCD finds that the newly adopted Ordinance in the Municipal Code remains out of compliance with State ADU Law despite the City‘s findings and explanations, HCD must notify the City and may notify the California Office of the Attorney General that the City is in violation of State ADU Law.
7 HCD appreciates the City‘s efforts in the preparation and adoption of its Municipal Code and welcomes the opportunity to assist the City in fully complying with State ADU Law. Please feel free to contact Mike VanGorder at [email protected] if you have any questions or wish to discuss any of HCD’s findings.

Sincerely,

Jamie Candelaria
Section Chief, ADU Policy
Housing Policy Development Division

4 Gov. Code, § 66326, subd. (c)(1).
5 Gov. Code, § 66326, subd. (b)(2)(A).
6 Gov. Code, § 66326, subd. (b)(2)(B).
7 Gov. Code, § 66326, subd. (c)(1).
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CITY OF MARTINEZ Community and Economic Development
525 Henrietta Street, Martinez, CA 94553-2394 (925) 372-3515 | Fax (925) 372-0257

January 29, 2026

Mike Van Gorder Via email
Senior Housing Policy Specialist, ADU Team
Department of Housing Community Development, Housing Policy Development Division 651 Bannon Street, Suite 400
Sacramento, CA 95811
Email: [email protected]

RE: Review of Martinez’ Accessory Dwelling Unit ( “ADU”) Governance under State ADU Law (Gov ernment Code, §§ 66310 - 66342)

Dear Mike Van Gorder,

Thank you for your letter summarizing the findings in response to the City of Martinez’s (“City”) ADU regulations. As requested, this letter serves as a formal written response to your letter, dated January 6, 2026.

The City has attached the proposed revised version of our ADU regulations that are intended to reflect your comments, recent State legislation, and minor clarifications. If after your review, you determine that any of your comments were misunderstood or incorrectly applied, we are happy to work with you to ensure our regulations are compliant with all required State laws. Additionally, below please find a formal response to each of your comments:

1. Statutory Numbering : The ADU regulations have been amended to correctly reflect the updated Government Code Section references. Proposed Amended Sections

22.43.120.I.1 and 2, 22.43.130.B, and 22.43.160.A.

2. Recent Legislation : The ADU regulations have been amended to reflect the latest and greatest State laws referenced, specifically addressing ADUs constructed in a county that is subject to a proclamation of a state of emergency, and removing the owner-occupancy requirement for JADUs. Proposed Amended Sections

22.43.120.B and 22.43.120.H.

3. Unit Allowance :
a. Single-Family Properties: The ADU regulations have been amended to reflect that single-family homes are ministerially permitted an attached ADU, detached ADU, and JADU, based on HCD’s interpretation of the law. While the City disagrees with HCD’s interpretation of allowing “all” of the allowable ADUs/JADUs, whereas Government Code Section 66323(a) states “any” as 282

selecting from a list of options, the City will make the change as this interpretation has been applied at multiple local jurisdictions and since the City is supportive of generating additional ADUs/JADUs (as demonstrated through creating an ADU Bonus Program, allowing ADUs on properties zoned or occupied by religious institutions, and being the first City in California to allow ADUs to be sold separately from the primary dwelling). The City also proposes to amend our ADU Bonus Program and regulations related ADUs on properties zoned or occupied by religious institutions to reflect this change with the quantity of permitted ADUs. Proposed Amended Sections

22.43.030 and 22.43.140.
b. Multifamily Properties: Staff is unclear how the City’s existing regulations are not compliant with the findings outlined. The City’s existing regulations already reflect that existing multifamily properties are permitted up to eight detached ADUs and proposed multifamily properties are permitted not more than two detached ADUs. Please provide clarification on how we can best address this comment.

4. Front Yard Setbacks : The City concurs that we are prohibited from enforcing front yard setbacks on ADUs that meet the criteria provided in Government Code Section 66321 and 66323 (to which we refer to as “State Exempt ADUs”). The City’s existing regulations are intended to only enforce front yard setbacks associated with the primary home in the event a proposed ADU does not qualify as a State Exempt ADU.

Please provide clarification on how we can best address this comment.

5. Stories : The ADU regulations have been amended to remove story requirements for ADUs. Proposed Amended Sections 22.43.070. 2 and 3.

6. Parking Exceptions: The ADU regulations have been amended to reflect the additional circumstances that exempt ADUs from parking requirements. Proposed Amended Sections 22.43.080.1 and 8.

7. Visibility: The ADU regulations have been amended to remove the exterior staircase requirements for ADUs. Proposed Amended Sections 22.43.100.C.

8. Owner Occupancy: The ADU regulations have been amended to reflect updated owner occupancy requirements for JADUs. Proposed Amended Sections

22.43.120.H.

If the proposed amendments to our ADU regulations comply with your findings, we plan to take the amendments to the City Council as an Emergency Ordinance so that they take effect as quickly as possible. The City Council is tentatively scheduled to consider the revised regulations on March 18, 2026. We would appreciate any comments by Friday February 27, 2026 to ensure the proposed regulations can remain on that agenda.

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Sincerely,

Brandon Northart, AICP
Associate Planner
City of Martinez

Enc.: Proposed Amendments to Martinez Municipal Code Chapter 22.43

CC: Michael Chandler, City Manager
Jill Bergman, Community and Economic Development Director Michael P. Cass, Assistant Community and Economic Development Director Teresa L. Highsmith, City Attorney

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CHAPTER 22.43 ACCESSORY DWELLING UNITS AND JUNIOR ACCESSORY DWELLING UNITS

22.43.010. Intent.

This Chapter is intended to comply with State Law (including, but not limited to, California Government Code Sections 66310 through 66342), by allowing accessory dwelling units (ADU) and junior accessory dwelling units (JADU) through ministerial review, su bject to meeting the objective design and development standards prescribed below. In the event of any conflict or inconsistency between this Chapter and State law or other Sections in the Municipal Code, the more permissive regulations shall prevail.

22.43.020. Where permitted.

A. A. Any ADU may be permitted:

1. On any lot zoned for a residential use, or any non -residentially zoned lot which is currently occupied with a single-family dwelling or multiple-family dwellingmultifamily dwellings.

2. On any lot zoned or occupied by a religious institution, as defined in Chapter 22.04.

B. ADUs shall not be located in the following locations:

1. In areas encumbered by a recorded easement, including but not limited to, public utility easements, conservation easements, access easements, pedestrian pathway easements and open space easements; or

2. In areas that extend into a creek bank.

22.43.030. Quantity of units.

The following number of ADUs and JADUs shall be the maximum number of accessory units permitted on lots subject to this Section.

A. Lot with one single -family dwelling unit: one detached ADU, one attached ADU, and one JADU.

B. Lot with more than one legal, conforming single-family dwelling unit: one detached ADU total, one attached ADU, and one JADU.

C. Lot with an existing multiple-family dwellingmultifamily dwellings, either:

1. Up to eight detached ADUs, but shall be limited to the number of existing multifamily dwelling units on the lot; or

2. At least one ADU converted from non -habitable portions of the existing primary structure that are not within the living space of a dwelling unit (e.g., basement, attic, garages storage room).) or the non-residential portions of a mixed-use building. The maximum number of ADUs converted from portions of the existing primary structure that are not within the living space of a dwelling unit shall not exceed 25 percent of the total number of existing dwelling Unitsunits on the lot.

D. Lot with a proposed multiple-familymultifamily dwelling:
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1.D. Up unit: up to two detached ADUs.

E. Lot with religious institution: up to twothree ADUs, subject to the following exceptions:

1. When a lot contains a religious institution and a single -family and/or multiple- familymultifamily dwelling, the maximum number of ADU(s) permitted shall be associated with only one of the uses, whichever permits more.

2. When a religious institution occupies multiple lots, only one of these lots shall be eligible for the ADU(s).

22.43.040. Unit size.

A. Minimum size. An ADU/JADU shall be a minimum of 150 square feet or the size necessary to accommodate an efficiency unit as defined by California Health and Safety Code Section 17958.1, whichever is greater.

B. Maximum size.

1. ADU. The total floor area of an attached or detached ADU shall not exceed 1,200 square feet, excluding any garage area. Non -statewide exemption State Exempt ADUs shall have a floor area smaller than the primary dwelling. In no case shall an ADU attached to the primary dwelling exceed 50 percent of the existing primary dwelling square footage, except a Statewide ExemptionState Exempt ADU shall be permitted.

2. JADU. The total floor area of a JADU shall not be more than 500 square feet of interior living space , excluding any shared sanitation facility within the primary dwelling structure.

C. Conversion restrictions. A JADU created entirely through conversion of an existing permitted structure is allowed a physical addition of no more than 150 square feet and shall be limited to accommodating ingress and egress, subject to all other applicable provisions of this Chapter. The conversion of an existing permitted accessory structure or a portion of an existing primary structure to an ADU is not subject to unit size requirements.

D. Lot coverage and floor area ratio. Newly constructed ADUs shall be exempt from the maximum lot coverage or floor area ratio allowed in the zoning or overlay district.

22.43.050. Setbacks.

A. Front. Both attached and detached Non-State ExemptionExempt ADUs shall be subject to the same front setback requirements as the primary dwelling.

B. Side. A setback of no less than four feet from the side lot line shall be required for either an attached or detached ADU.

C. Rear. A setback of no less than four feet from the rear lot line shall be required for either an attached or detached ADU.

D. Expansion of converted existing structures. The first floor of an existing permitted structure which has setbacks of less than four feet and is planned for conversion into 286

an ADU can be expanded, so long as the expansion does not result in additional encroachment into the required setbacks.

E. Architectural features. Architectural features including sills, eave overhangs, awnings, and cornices may extend into a required setback or space between buildings not more than 18 inches.

22.43.060. Building separation055. Sight Distance.

Both attached and detached ADUs shall not encroach within the sight distance area, as established by the California Department of Transportation Highway Design Manual, Chapter 400, Section 405.

22.43.060. Building separation.

A. Non-state exemptionState Exempt ADU. For any detached ADU which does not qualify as a State Exemption ADU, the distance between the ADU and any other structures shall be at least five feet.

B. State exemptionExempt ADU. Detached ADUs located closer than five feet to any other structures without an automatic residential fire sprinkler system shall be subject to a minimum of one-hour fire-resistance rating and shall comply with all California Building Code and California Fire Code fire-rating requirements.

22.43.070. Height.

Building height shall be measured as the vertical distance from any point on the natural grade, to the topmost point of the building immediately above.

A. Detached ADU.

1. New construction. A maximum height of 18 feet for a new detached ADU shall be permitted. An additional two feet in height to accommodate a roof pitch on the ADU that is aligned with the roof pitch of the primary dwelling unit shall also be permitted.

2. Addition to an existing detached structure. An ADU which results in an addition to an existing detached structure that is not the primary dwelling shall have a maximum height of 25 feet or the height limitation associated with the primary dwelling, whichever is lower, and shall not exceed two stories.

3. Restrictions. A Detached ADU shall be either a one-story structure or second-story addition to an existing legal structure.

B. Attached ADU. A maximum height of 25 feet or the height limitation associated with the primary dwelling, whichever is lower, shall be permitted for an ADU that is attached to a primary dwelling.

22.43.080. Parking.

A. Minimum parking. A minimum of one independently usable off -street parking space shall be provided for each ADU, which shall be provided in addition to the required parking for the primary residential dwelling(s), except as outlined in Subsections C and D. No parking is required for a JADU.
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B. Parking design. This space need not be covered, and shall comply with all development standards set forth in Chapter 22.36 (Off-Street Parking and Loading Facilities), except the space may be compact and/or uncovered. A tandem parking space may also be used to meet the parking requirement for an ADU, providing such space will not encumber access to a required parking space for the primary single-family dwelling.

C. Replacement parking. When a garage, carport, or covered parking structure is demolished or converted in conjunction with the construction of an ADU or JADU, no parking replacement spaces for the primary residence shall be required. Any other required off-street parking spaces shall be maintained for the primary residence, and may be located in any configuration on the same lot as the ADU, including, but not limited to, as covered spaces, uncovered spaces, or tandem spaces, or by the use of mechanical automobile parking lifts. A demolition permit for a detached garage that is to be replaced with an accessory dwelling unit shall be reviewed with the building permit application for the accessory dwelling unit and issued at the same time. The applicant is not required to provide written notice or post a placard for the demolition of a detached garage, that is to be replaced with an accessory dwelling unit, unless the p roperty is located within the Historic Overlay District or another architecturally and historically significant historic district.

D. Parking exceptions. Off -street parking shall not be required for an ADU in any of the following instances:

1. The ADU ishas no bedroom (such as a Studio Unit.studio unit or efficiency unit).

2. The ADU is located within one-half mile walking distance of public transit, including various means of transportation that charge set fees, run on fixed schedules, and are available to the public.

3. The ADU is located within the Historic Overlay District or another architecturally and historically significant historic district.

4. The ADU is part of the proposed or existing primary dwelling or an accessory structure.

5. When on-street parking permits are required but not offered to the occupant of the ADU.

6. When there is a designated pick-up or drop-off location for car share vehicles located within one block of the ADU.

7. The ADU is consistent with affordability requirements outlined in Section 22.43.140.

8. When a building permit application for an ADU is submitted with a building permit application to create a new single -family dwelling or a new multifamily dwelling on the same lot, provided that the accessory dwelling unit or the parcel satisfies any other criteria listed under these parking exceptions.

22.43.090. Design standards.

The following design standards shall apply to all Non-State ExemptionExempt ADUs:
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